Charles Schwab (NYSE:SCHW) Board of Directors Initiates Stock Buyback Plan

Key Points

• Charles Schwab's Board of Directors has authorized a $20 billion share buyback program, allowing the repurchase of up to 11.4% of its outstanding shares, indicating the board's belief that the shares are undervalued.
• Recent analyst actions show a mix of upgraded and downgraded ratings, with the average target price for Charles Schwab stock now at $98.65 from various brokerages, reflecting a general consensus of a "Moderate Buy".
• The company reported $1.14 earnings per share for the last quarter, surpassing estimates and demonstrating a 24.8% year-over-year revenue increase, showcasing strong financial performance amid market conditions.

Charles Schwab (NYSE:SCHW - Get Free Report) declared that its Board of Directors has authorized a share buyback program on Friday, July 25th, RTT News reports. The company plans to repurchase $20.00 billion in outstanding shares. This repurchase authorization authorizes the financial services provider to purchase up to 11.4% of its shares through open market purchases. Shares repurchase programs are often a sign that the company's board believes its shares are undervalued.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on SCHW. Redburn Atlantic raised shares of Charles Schwab from a "sell" rating to a "neutral" rating and boosted their price target for the stock from $65.00 to $82.00 in a report on Monday, June 9th. Truist Financial boosted their price target on shares of Charles Schwab from $100.00 to $107.00 and gave the stock a "buy" rating in a report on Monday. JMP Securities boosted their price target on shares of Charles Schwab from $106.00 to $110.00 and gave the stock a "market outperform" rating in a report on Monday. William Blair downgraded shares of Charles Schwab from a "strong-buy" rating to a "hold" rating in a report on Thursday, July 3rd. Finally, Barclays boosted their price target on shares of Charles Schwab from $106.00 to $113.00 and gave the stock an "overweight" rating in a report on Friday, July 18th. Two research analysts have rated the stock with a sell rating, four have given a hold rating and sixteen have assigned a buy rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $98.65.

Charles Schwab Price Performance

Shares of SCHW traded up $0.55 during midday trading on Friday, hitting $97.05. 9,105,646 shares of the company traded hands, compared to its average volume of 8,598,255. The stock has a 50-day moving average of $90.34 and a 200-day moving average of $82.81. Charles Schwab has a one year low of $61.15 and a one year high of $98.28. The firm has a market cap of $176.33 billion, a P/E ratio of 26.09, a PEG ratio of 0.93 and a beta of 0.93. The company has a debt-to-equity ratio of 0.53, a current ratio of 0.53 and a quick ratio of 0.53.

Charles Schwab (NYSE:SCHW - Get Free Report) last announced its quarterly earnings results on Friday, July 18th. The financial services provider reported $1.14 earnings per share for the quarter, beating the consensus estimate of $1.10 by $0.04. Charles Schwab had a return on equity of 19.73% and a net margin of 33.68%. The firm had revenue of $5.85 billion for the quarter, compared to analysts' expectations of $5.64 billion. During the same period in the prior year, the business posted $0.73 earnings per share. The company's revenue was up 24.8% on a year-over-year basis. As a group, sell-side analysts predict that Charles Schwab will post 4.22 EPS for the current fiscal year.

Charles Schwab Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, August 22nd. Stockholders of record on Friday, August 8th will be given a dividend of $0.27 per share. This represents a $1.08 annualized dividend and a dividend yield of 1.11%. The ex-dividend date is Friday, August 8th. Charles Schwab's dividend payout ratio is presently 29.03%.

Insider Activity

In other news, Director Paula A. Sneed sold 8,647 shares of the business's stock in a transaction dated Tuesday, May 27th. The stock was sold at an average price of $88.06, for a total transaction of $761,454.82. Following the completion of the transaction, the director owned 105,654 shares of the company's stock, valued at approximately $9,303,891.24. The trade was a 7.57% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, General Counsel Peter J. Morgan III sold 10,176 shares of the business's stock in a transaction dated Thursday, May 22nd. The stock was sold at an average price of $87.39, for a total value of $889,280.64. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 116,313 shares of company stock valued at $10,264,091. 6.30% of the stock is currently owned by insiders.

Charles Schwab Company Profile

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. The company operates in two segments, Investor Services and Advisor Services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.