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Webster Financial Corp.'s shares jumped to a 4-year high Wednesday after a Raymond James analyst upgraded his rating on the bank's stock, saying it's becoming more profitable.
THE SPARK: Analyst Anthony Polini lifted Webster to "Strong Buy" from "Outperform" ahead of the release of its third-quarter results on Oct. 12. He raised his earnings estimates for 2012 and 2013 to above analysts' average estimate and lifted his price target on Webster Financial's stock by $4 to $28.
THE BIG PICTURE: Webster Financial is the parent company for Webster Bank, which has about 165 branches in Connecticut, Massachusetts, New York and Rhode Island.
THE ANALYSIS: Polini is upbeat on Webster Financial's expenses and income from fees, he expects growth in commercial lending and commercial real estate lending, and he says mortgage banking is strong while credit quality is improving.
For the quarter ending in September, Polini anticipates the company will beat market expectations by two cents at 47 cents per share.
Looking forward, he increased his 2012 earnings forecast by 10 cents to $1.80 and his 2013 forecast by 12 cents to $1.92. Analysts polled by FactSet, on average, are expecting the company to earn $1.78 for 2012 and $1.80 for 2013.
SHARE ACTION: Shares of the Waterbury, Conn.-based company gained 74 cents, or 3.1 percent, to $24.72 in afternoon trading. The stock had peaked at $24.98 in earlier trading, its highest point since October 2008, when the financial crisis was accelerating.