UBS assumed coverage of Webster Financial (WBS) with a Buy rating and price target of $76, up from $60. The actions the bank has taken to reduce rate sensitivity will set it up for a more favorable net interest income path from here, the analyst tells investors in a research note. The firm says Webster’s asset sensitivity has declined over the past year, primarily due to the restructuring of its securities portfolio, adding favorable hedges, and deposit mix shifts. UBS does not think the stock is getting credit for its reduced asset sensitivity or consistently above peer returns.
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