Charles Schwab Poised for Strong Earnings Growth in Q4
Company Dishouts Results Amid Market Resilience
Westlake, Texas-based The Charles Schwab Corporation (SCHW) acts as a savings and loan holding company. The firm boasts a market capitalization exceeding $133 billion and offers a range of services such as wealth management, securities brokerage, banking, asset management, custody, and financial advisory. Investors are eagerly awaiting the release of Schwab’s Fourth Quarter earnings set for Wednesday, January 15.
Analysts project Schwab to report adjusted earnings of $0.88 per share, marking an impressive rise of 29.4% from $0.68 per share in the previous year’s quarter. The company has consistently met or exceeded earnings expectations for the past four quarters. In its last reported quarter, Schwab maintained an adjusted EPS of $0.77, surpassing analysts’ benchmarks by 2.7%.
For fiscal year 2024, market specialists expect Schwab’s adjusted EPS to be $3.12, which is slightly lower than the $3.13 reported in fiscal 2023. Despite this dip, earnings for fiscal 2025 are anticipated to rebound, climbing 25% year-over-year to $3.90 per share.
Over the past year, SCHW stock has risen by 7.5%. However, it has underperformed compared to the Financial Select Sector SPDR Fund (XLF), which soared 28.4%, and the S&P 500 Index ($SPX), which gained 23.8% during the same period.
Following the release of its strong Q3 results on October 15, Charles Schwab’s stock jumped 6.1%. The company benefited from robust net asset growth and a resilient equity market, resulting in a significant year-over-year increase of 26.8% in total client assets, which now exceed $9.9 trillion. This surge contributed to a 20.6% rise in asset management and administration fees, reaching $1.5 billion.
Despite these accomplishments, the company reported a modest 5.2% increase in total net revenues to $4.8 billion, attributed to declines in interest revenues and fees from bank deposit accounts. Nonetheless, Schwab exhibited strong expense management, leading to a remarkable 27.7% year-over-year growth in net income attributable to shareholders, amounting to $1.3 billion.
The consensus recommendation on SCHW stock leans moderately positive, with an overall “Moderate Buy” rating. Out of the 21 analysts monitoring the stock, 10 suggest “Strong Buy,” two recommend “Moderate Buy,” seven advise “Hold,” one votes for “Moderate Sell,” and one has a “Strong Sell” rating. The average price target of $83.45 indicates a potential upside of 12.9% from current levels.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
