Charles Schwab Corporation NYSE: SCHW bankowość inwestycyjna

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Charles Schwab (SCHW) gave a mixed first-quarter report, and said it is pausing its share buyback program due to industry and regulatory uncertainty. Yet, the stock reversed higher and closed nearly 4% higher. Shares appear to have found support around 50, though they have a lot of ground to make up.

Latest Release
Apr 17, 2023

EPS / Forecast
0.93 / 0.9

Revenue / Forecast
5.12B / 5.14B

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Buy This Stock at a 40% Discount Before it Rebounds
by Shah Gilani, Total Wealth • April 19, 2023

https://dailytradealert.com/2023/04/19/ ... -rebounds/

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Raymond James analysts provided a boost to Charles Schwab (NYSE:SCHW) shares on Monday after he upgraded the stock to Outperform with a $63 price target in a note.

The stock is currently up 2.88% at over $50 per share, adding to Friday's more than 2% gain.

The analysts told investors that they believe recent data indicates that client cash sorting at Schwab is tapering, which "should support balance sheet and net interest margin stabilization in 2H23."

"We do think consensus estimates for 2023/24 remain too high but believe the buy-side is more aligned with our below-consensus views," they wrote.

The analysts acknowledged that "the specter of a stricter regulatory regime may be an overhang for some time" but stated that they think the incremental risk to Schwab's earnings power is "likely to be somewhat limited."

"On the valuation front, elevated cash sorting is a stark reminder of the interest rate risk inherent within Schwab's business model. However, the company has very little credit risk and an attractive core growth story that was unaffected by recent macro events, which we believe can lead to P/E multiple re-rating once EPS estimates stabilize," they concluded.

raymondjames

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Latest Release
Jul 18, 2023

EPS / Forecast
0.75 / 0.72

Revenue / Forecast
4.66B / 4.63B

(Reuters) - U.S. brokerage firm Charles Schwab (NYSE:SCHW) reported a smaller-than-expected drop in second-quarter profit on Tuesday as a jump in asset management fees helped soften the hit from a decline in interest revenue.

The company relies primarily on clients' uninvested cash to fund its interest-earning businesses such as purchase of fixed-income assets and lending.

However, some clients have been moving cash to alternatives that fetch better returns to make the most of a high-interest rate environment following hefty rate hikes by the Federal Reserve to rein in sticky inflation.

Schwab has had to turn to supplementary funding sources to counter this churn. Last month, the Westlake, Texas-based company said it was relying on more expensive funding sources, like borrowing from the Federal Home Loan Bank, to supplement its cash flow.

This weighed on Schwab's net interest revenue. It tumbled 10% to $2.29 billion in the second quarter.

Meanwhile, inflows into the company's funds boosted asset management and administration fees by 12% to $1.17 billion.

The report comes during a banks-heavy earnings week when investors will be scrutinizing updates for any sign of lingering trouble after the crisis earlier this year rattled the industry.

Excluding one-time costs, Schwab's profit fell 25% to $1.49 billion, or 75 cents per share, for the three months ended June 30. Analysts had expected 71 cents per share, according to Refinitiv IBES data.

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Charles Schwab Corp (NYSE:SCHW) topped the list of gainers, up more than 12% following its better-than-expected quarterly results.

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NEW YORK (Reuters) - Shares of Charles Schwab (NYSE:SCHW) fell by nearly 5% to a one-month low on Tuesday after the U.S. brokerage unveiled a cost-cutting plan that came with steep one-time charges.

Charles Schwab announced on Monday that it planned to layoff staff and close or downsize some corporate offices to save about $500 million.

But Charles Schwab is expected to incur one-time charges of up to $500 million from the cost-cutting measure, potentially dampening its profit in the second half of this year.

Charles Schwab's stock fell as much as 5.3% to $56.26, the lowest level since July and the biggest one-day percentage drop since March. The stock, which is down 32% year-to-date, ended the session at $56.46.

Charles Schwab is among brokerages and other financial firms, including State Street (NYSE:STT), Northern Trust (NASDAQ:NTRS) and Bank of New York Mellon (NYSE:BK), that have been facing a sharp drop in customer deposits and an uptick in unrealized fixed-income asset losses since the U.S. Federal Reserve began hiking interest rates last year.

While higher rates have helped Charles Schwab and other firms earn more from interest income, the drop in deposits have drained them of a cheap source of funding, forcing them to raise new capital or cut costs.

The yield on the benchmark 10-year note reached 4.366% on Tuesday, a high last seen in November 2007. Yields move inversely to bond prices, meaning the value of Treasuries held by banks on their balance sheets has fallen.

"We believe the stock has declined in recent days partly from the overall pullback in the stock market and potentially from the higher 10-year Treasury rate," Morningstar analyst Michael Wong said in an investor note.

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(Reuters) - U.S. brokerage firm Charles Schwab (NYSE:SCHW) posted a smaller-than-expected drop in quarterly profit on Monday as strength in asset management fees softened the blow from a fall in its net interest revenue.

The company relies primarily on clients' uninvested cash to fund its interest-earning businesses - like the purchase of fixed-income assets and lending.

Charles Schwab's shares were down 1.6% in premarket trade.

Inflows into the company's funds boosted asset management and administration fees by nearly 17%, to $1.22 billion.

However, it is among various financial firms facing a drop in customer deposits as clients have been reallocating their cash to alternatives with better returns to make the most of a high-interest-rate environment.

Drops in deposits have drained firms like Charles Schwab of a cheap source of funding, forcing them to either raise new capital or cut costs.

The Westlake, Texas-based company had said in August it would lay off staff and close or downsize some corporate offices as part of its cost-cutting plans.

Charles Schwab's net interest revenue tumbled 23.5%, to $2.24 billion in the third quarter, reflecting the impact of client allocation decisions within a higher-interest-rate environment, it said.

Its quarterly revenue dropped 16.2%, to $4.61 billion, compared to the same quarter last year, missing analysts' average estimate of $4.63 billion, according to LSEG data.

Excluding one-time costs, Charles Schwab's profit fell 31% year-over-year, to $1.52 billion, or 77 cents per share, for the three months ended Sept. 30. Analysts had expected 74 cents per share, according to LSEG data.