Charles Schwab: A Look at Recent Performance and Market Position
Westlake, Texas-based The Charles Schwab Corporation (SCHW) operates as a savings and loan holding company. With a market cap of $126.2 billion, Charles Schwab offers a wide range of services, including wealth management, securities brokerage, banking, asset management, custody, and financial advisory.
Mixed Market Performance Over the Past Year
This capital markets giant has underperformed the wider market in the last year. Year-to-date, SCHW stock has increased by 3.1% and risen 27.1% over the past 52 weeks. In contrast, the S&P 500 Index ($SPX) has posted gains of 19.8% in 2024 and 31.1% over the past year.
When comparing performance, Charles Schwab has also fallen short of the SPDR S&P Capital Markets ETF (KCE), which has gained 28.4% in 2024 and 51% over the past year.
Recent Strength Amidst Overall Underperformance
Despite its lackluster annual performance, Charles Schwab’s stock has shown strength recently, gaining 9.6% in the last month. Following the announcement of its better-than-expected Q3 earnings on October 15, SCHW stock surged by 6.1%. The company reported a tremendous 26.8% year-over-year rise in total client assets, which reached a record $9.9 trillion. Additionally, total net revenues grew by 5.2% year-over-year to $4.8 billion, driven by a significant 20.6% increase in asset management and administration fees, hitting $1.5 billion.
However, adjusted earnings per share (EPS) held steady at $0.77, the same as the previous year’s quarter. Notably, net interest revenue dipped slightly, down 67 basis points from a year ago to $2.2 billion.
Analysts Expect Slight Decline in Earnings
For the fiscal year ending in December, analysts anticipate a slight decline in adjusted EPS to $3.11. Despite this forecast, Charles Schwab has a strong history of earnings surprises, having either matched or exceeded analysts’ expectations in each of the last four quarters. The adjusted EPS of $0.77 in the most recent quarter exceeded consensus estimates by 2.7%.
Stock Analyst Ratings and Price Targets
Currently, SCHW stock carries a consensus rating of “Moderate Buy.” Out of 21 analysts covering the stock, nine recommend a “Strong Buy,” two suggest a “Moderate Buy,” eight advise a “Hold,” one advocates for a “Moderate Sell,” and one rates it as “Strong Sell.”
This assessment has largely remained stable over the past three months. On October 24, Morgan Stanley (MS) analyst Michael Cyprys maintained an “Equal-Weight” rating and adjusted the price target to $74, suggesting a potential upside of 4.3% from current levels. The average price target of $76.30 indicates a potential upside of 7.5%. Moreover, the highest target of $90 implies a possible increase of 26.8%.
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On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
