Charles Schwab Earns Buy Rating from Deutsche Bank on Strong Q1 Performance and Positive Growth Outlook

Deutsche Bank analyst Brian Bedell reiterated a Buy rating on Charles Schwab (SCHW – Research Report) today and set a price target of $87.00.

Brian Bedell has given his Buy rating due to a combination of factors surrounding Charles Schwab’s recent financial performance and strategic initiatives. The company’s first-quarter earnings per share were notably good, surpassing both Deutsche Bank’s and consensus estimates, with a growth rate exceeding management’s guidance. Additionally, the firm’s operating margin was stronger than anticipated, indicating efficient cost management. This, coupled with robust March metrics, suggests a solid financial foundation. Bedell’s analysis is also buoyed by management’s positive business update commentary, highlighting strong asset growth and a decrease in client attrition levels, which aligns with his investment thesis.

The management’s confidence in net interest margin expansion and the successful paydown of high-cost supplemental borrowing further strengthen the case for a Buy rating. Bedell’s positive outlook extends to the anticipated smooth transition of the final cohort of AMTD clients, which could enhance user experience and stability. Based on these assessments, Bedell has raised earnings estimates for 2024 and 2025 and increased the price target for Charles Schwab’s stock. The overall picture painted by the March metrics and management commentary aligns with the analyst’s view that the company is on a trajectory of growth and profitability improvement, justifying the optimistic stance on the stock.

In another report released on April 12, Piper Sandler also maintained a Buy rating on the stock with a $78.00 price target.

Based on the recent corporate insider activity of 80 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SCHW in relation to earlier this year.

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Charles Schwab (SCHW) Company Description:

Founded in 1986, The Charles Schwab Corp. is a savings and loan holding company, which provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. It primarily operates through two segments, Investor Services and Advisor Services. The company is based in San Francisco, California.