Charles Schwab (NYSE:SCHW) Board Declares Share Repurchase Program

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) announced that its Board of Directors has initiated a stock repurchase program on Friday, July 25th, RTT News reports. The company plans to repurchase $20.00 billion in shares. This repurchase authorization allows the financial services provider to purchase up to 11.4% of its stock through open market purchases. Stock repurchase programs are typically a sign that the company's board of directors believes its shares are undervalued.

Wall Street Analyst Weigh In

Several equities research analysts have issued reports on the company. The Goldman Sachs Group upgraded Charles Schwab from a "neutral" rating to a "buy" rating and set a $100.00 price target for the company in a report on Friday, April 25th. Barclays increased their price target on Charles Schwab from $106.00 to $113.00 and gave the stock an "overweight" rating in a report on Friday, July 18th. Keefe, Bruyette & Woods upped their price objective on Charles Schwab from $102.00 to $108.00 and gave the stock an "outperform" rating in a research report on Monday, July 21st. Raymond James Financial reaffirmed an "outperform" rating and set a $99.00 price objective on shares of Charles Schwab in a research report on Friday, July 18th. Finally, UBS Group upped their price objective on Charles Schwab from $95.00 to $96.00 and gave the stock a "buy" rating in a research report on Tuesday, April 22nd. Two equities research analysts have rated the stock with a sell rating, four have assigned a hold rating and sixteen have issued a buy rating to the company's stock. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $99.35.

Charles Schwab Stock Performance

Shares of NYSE SCHW traded up $0.49 during midday trading on Tuesday, hitting $98.40. 4,019,421 shares of the company's stock were exchanged, compared to its average volume of 10,209,546. The company has a quick ratio of 0.53, a current ratio of 0.53 and a debt-to-equity ratio of 0.53. Charles Schwab has a 12 month low of $61.15 and a 12 month high of $99.59. The company's 50 day moving average price is $90.52 and its 200 day moving average price is $83.12. The firm has a market capitalization of $178.79 billion, a PE ratio of 26.47, a price-to-earnings-growth ratio of 0.93 and a beta of 0.93.

Charles Schwab (NYSE:SCHW - Get Free Report) last issued its earnings results on Friday, July 18th. The financial services provider reported $1.14 EPS for the quarter, topping 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 company had revenue of $5.85 billion during the quarter, compared to the consensus estimate of $5.64 billion. During the same period in the previous year, the company posted $0.73 EPS. The firm's revenue for the quarter was up 24.8% compared to the same quarter last year. As a group, analysts predict that Charles Schwab will post 4.22 earnings per share for the current fiscal year.

Charles Schwab Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, August 22nd. Shareholders of record on Friday, August 8th will be issued a $0.27 dividend. This represents a $1.08 dividend on an annualized basis and a yield of 1.10%. The ex-dividend date of this dividend is Friday, August 8th. Charles Schwab's dividend payout ratio is 29.03%.

Insider Transactions at Charles Schwab

In other Charles Schwab news, insider Paul V. Woolway sold 10,129 shares of Charles Schwab stock in a transaction on Wednesday, June 18th. The stock was sold at an average price of $90.01, for a total value of $911,711.29. Following the completion of the transaction, the insider directly owned 39,154 shares of the company's stock, valued at $3,524,251.54. The trade was a 20.55% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Paula A. Sneed sold 8,647 shares of Charles Schwab stock in a transaction on Tuesday, May 27th. The shares were sold at an average price of $88.06, for a total value of $761,454.82. Following the completion of the transaction, the director directly owned 105,654 shares of the company's stock, valued at $9,303,891.24. This represents a 7.57% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last quarter, insiders sold 116,313 shares of company stock worth $10,264,091. 6.30% of the stock is currently owned by company 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.