WBS
Webster Financial Corporation
$77.57
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 2.5% below fair value
You pay
$77.57
Bear
$53.04
Fair
$79.59
Bull
$95.52
Bear
$53.04
-31.6%
ROTCE 12.0% → 1.37x TBV
Fair
$79.59
+2.6%
ROTCE 16.0% → 2.05x TBV
Bull
$95.52
+23.1%
ROTCE 18.4% → 2.46x TBV
Adjust Assumptions
16.0%
9.8%
Key Value Driver
ROTCE (16.0%) vs. cost of equity (9.8%)
Implied Market Multiple
2.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (31 analysts)
$76.00
Divergence from AlphaVal
5%
Summary
With ROTCE of 16.0% vs. 9.8% cost of equity, fair P/TBV is 2.05x on $38.77 tangible book, implying $79.59 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly