Charles Schwab (NYSE:SCHW) Coverage Initiated at BMO Capital Markets

Key Points

• BMO Capital Markets has initiated coverage on Charles Schwab with an "outperform" rating and a price target of $110.00, suggesting a potential upside of 18.60% from its current price.
• The company recently announced a $20.00 billion share buyback program, allowing it to purchase up to 11.6% of its shares, indicating management believes the stock is undervalued.
• Charles Schwab reported a 24.8% increase in revenue year-over-year for the latest quarter, with earnings per share (EPS) beating estimates at $1.14.

BMO Capital Markets assumed coverage on shares of Charles Schwab (NYSE:SCHW - Get Free Report) in a research note issued on Friday,Benzinga reports. The brokerage set an "outperform" rating and a $110.00 price target on the financial services provider's stock. BMO Capital Markets' price objective would suggest a potential upside of 18.60% from the company's current price.

SCHW has been the subject of several other reports. Citigroup increased their price target on Charles Schwab from $105.00 to $110.00 and gave the company a "buy" rating in a research report on Monday, July 21st. Barclays increased their price objective on Charles Schwab from $106.00 to $113.00 and gave the company an "overweight" rating in a report on Friday, July 18th. Zacks Research lowered shares of Charles Schwab from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, September 17th. Truist Financial set a $112.00 price target on shares of Charles Schwab in a research note on Thursday. Finally, Wells Fargo & Company set a $102.00 price objective on shares of Charles Schwab and gave the stock an "overweight" rating in a research note on Friday, July 18th. Seventeen investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, Charles Schwab has a consensus rating of "Moderate Buy" and an average price target of $100.52.

Charles Schwab Stock Performance

Shares of SCHW opened at $92.75 on Friday. The stock has a market capitalization of $168.36 billion, a price-to-earnings ratio of 24.93, a PEG ratio of 0.91 and a beta of 0.97. Charles Schwab has a 12 month low of $62.41 and a 12 month high of $99.59. The firm has a fifty day simple moving average of $95.42 and a 200 day simple moving average of $88.46. The company has a current ratio of 0.55, a quick ratio of 0.55 and a debt-to-equity ratio of 0.47.

Charles Schwab (NYSE:SCHW - Get Free Report) last issued its quarterly earnings results on Friday, July 18th. The financial services provider reported $1.14 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.10 by $0.04. Charles Schwab had a net margin of 33.68% and a return on equity of 19.30%. The firm had revenue of $5.85 billion for the quarter, compared to analyst estimates of $5.64 billion. During the same period in the previous year, the business earned $0.73 EPS. The company's revenue was up 24.8% compared to the same quarter last year. Research analysts forecast that Charles Schwab will post 4.22 EPS for the current fiscal year.

Charles Schwab announced that its board has authorized a share buyback program on Thursday, July 24th that permits the company to buyback $20.00 billion in shares. This buyback authorization permits the financial services provider to reacquire up to 11.6% of its shares through open market purchases. Shares buyback programs are typically a sign that the company's board believes its shares are undervalued.

Insiders Place Their Bets

In other news, insider Jonathan S. Beatty sold 6,144 shares of the firm's stock in a transaction that occurred on Thursday, August 28th. The shares were sold at an average price of $96.81, for a total transaction of $594,800.64. Following the transaction, the insider directly owned 11,923 shares of the company's stock, valued at approximately $1,154,265.63. This trade represents a 34.01% 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 this hyperlink. Also, General Counsel Peter J. Morgan III sold 50,016 shares of the business's stock in a transaction that occurred on Wednesday, August 27th. The shares were sold at an average price of $97.00, for a total value of $4,851,552.00. The disclosure for this sale can be found here. Insiders sold a total of 267,128 shares of company stock valued at $26,232,077 in the last three months. Insiders own 6.30% of the company's stock.

Hedge Funds Weigh In On Charles Schwab

Several hedge funds and other institutional investors have recently made changes to their positions in SCHW. Bryn Mawr Trust Advisors LLC increased its holdings in Charles Schwab by 2.0% in the 2nd quarter. Bryn Mawr Trust Advisors LLC now owns 5,489 shares of the financial services provider's stock worth $501,000 after purchasing an additional 107 shares in the last quarter. Nicolet Bankshares Inc. grew its holdings in shares of Charles Schwab by 0.8% during the second quarter. Nicolet Bankshares Inc. now owns 13,049 shares of the financial services provider's stock worth $1,191,000 after purchasing an additional 107 shares during the last quarter. Pine Haven Investment Counsel Inc grew its holdings in shares of Charles Schwab by 0.3% during the second quarter. Pine Haven Investment Counsel Inc now owns 41,793 shares of the financial services provider's stock worth $3,813,000 after purchasing an additional 110 shares during the last quarter. Patrick M Sweeney & Associates Inc. raised its holdings in Charles Schwab by 0.8% in the 2nd quarter. Patrick M Sweeney & Associates Inc. now owns 13,330 shares of the financial services provider's stock valued at $1,219,000 after buying an additional 110 shares during the last quarter. Finally, Principle Wealth Partners LLC boosted its position in Charles Schwab by 2.0% during the 2nd quarter. Principle Wealth Partners LLC now owns 5,890 shares of the financial services provider's stock worth $537,000 after buying an additional 113 shares during the period. 84.38% of the stock is currently owned by institutional investors and hedge funds.

About Charles Schwab

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.

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