Jefferies has shifted its rating on Webster Financial (NYSE: WBS) from Buy to Hold and adjusted its price target downward to $75.00 from $80.00 following Webster’s agreement to be acquired by Banco Santander. The bank announced the deal on Monday, under terms that value Webster at approximately $75.59 per share.
The acquisition price equates to a roughly 15% premium relative to Webster’s closing price on the prior Friday of $66. The deal values Webster at about two times its tangible book value for the fourth quarter of 2025, according to the provided figures.
In explaining the decision, Jefferies characterized the Santander offer as a fair valuation in the prevailing market environment and pointed to limited potential for upside above the deal consideration price. That constrained upside was the principal reason Jefferies moved the stock to Hold.
The timing of Jefferies’ action followed Webster’s share price movement on Tuesday after the acquisition announcement.
Quarterly results and deal specifics
Separately, Webster reported fourth-quarter 2025 results that beat analyst expectations. The company posted earnings per share of $1.59, ahead of the forecasted $1.53, and reported revenue of $746.2 million versus an anticipated $731.51 million. Management also disclosed the terms of the Santander acquisition, which values the bank at roughly $12.3 billion and is composed of 65% cash and 35% stock, with a pricing assumption of $75 per share.
Following the announcement of the merger, other brokerages also updated their views. RBC Capital shifted its rating on Webster from Outperform to Sector Perform while increasing its price target to $75.00 from $72.00. Keefe, Bruyette & Woods raised its price target to $77.00, citing "strong Q4 results" and noting positive momentum in loan growth alongside expectations for improving credit quality through 2025.
Context and market reaction
The combination of an agreed takeover price that includes a significant cash component and a valuation near multiple-of-tangible-book metrics has influenced analyst positioning. Jefferies concluded that, given the deal terms and the price set by Santander, the potential for additional near-term share appreciation above the transaction consideration is limited—prompting the downgrade.
Investors and market participants will likely monitor regulatory and integration milestones tied to the transaction as the parties move forward, while analysts weigh the trade-off between realized deal value and upside beyond the offer.