Charles Schwab (NYSE:SCHW) Lowered to Hold Rating by Zacks Research

Key Points

• Charles Schwab has been downgraded from a strong-buy to a hold rating by Zacks Research as of Wednesday.
• Despite the downgrade, various analysts have raised their price targets for the stock, with current consensus showing a Moderate Buy rating and an average target price of $100.00.
• The company has initiated a $20 billion share buyback program, indicating management's confidence in the stock's value.

Charles Schwab (NYSE:SCHW - Get Free Report) was downgraded by investment analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a report released on Wednesday,Zacks.com reports.

Other research analysts also recently issued research reports about the company. Piper Sandler lifted their price target on Charles Schwab from $80.00 to $92.00 and gave the company a "neutral" rating in a report on Tuesday, July 15th. Citigroup lifted their target price on Charles Schwab from $105.00 to $110.00 and gave the company a "buy" rating in a research note on Monday, July 21st. Barclays raised 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. Morgan Stanley increased their target price on shares of Charles Schwab from $117.00 to $131.00 and gave the stock an "overweight" rating in a research report on Tuesday, July 29th. Finally, Raymond James Financial restated an "outperform" rating and set a $99.00 price target on shares of Charles Schwab in a report on Friday, July 18th. Sixteen analysts have rated the stock with a Buy rating, four have given a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average target price of $100.00.

Charles Schwab Stock Performance

Shares of SCHW opened at $93.30 on Wednesday. The company has a 50-day moving average of $95.38 and a two-hundred day moving average of $87.13. The stock has a market cap of $169.35 billion, a price-to-earnings ratio of 25.08, a PEG ratio of 0.91 and a beta of 0.96. The company has a debt-to-equity ratio of 0.47, a current ratio of 0.55 and a quick ratio of 0.55. Charles Schwab has a one year low of $62.41 and a one year high of $99.59.

Charles Schwab (NYSE:SCHW - Get Free Report) last issued its quarterly earnings results on Friday, July 18th. The financial services provider reported $1.14 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 business had revenue of $5.85 billion during the quarter, compared to the consensus estimate of $5.64 billion. During the same quarter in the prior year, the firm earned $0.73 EPS. The firm's quarterly revenue was up 24.8% on a year-over-year basis. On average, equities research analysts expect that Charles Schwab will post 4.22 earnings per share for the current year.

Charles Schwab declared that its Board of Directors has initiated a share buyback program on Thursday, July 24th that authorizes the company to buyback $20.00 billion in outstanding shares. This buyback authorization authorizes the financial services provider to buy up to 11.6% of its shares through open market purchases. Shares buyback programs are typically a sign that the company's management believes its stock is undervalued.

Insider Transactions at Charles Schwab

In other Charles Schwab news, Chairman Walter W. Bettinger sold 173,876 shares of the firm's stock in a transaction on Tuesday, July 29th. The shares were sold at an average price of $98.84, for a total value of $17,185,903.84. Following the sale, the chairman directly owned 590,734 shares in the company, valued at $58,388,148.56. This trade represents a 22.74% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. Also, insider Jonathan S. Beatty sold 6,144 shares of the business's stock in a transaction dated Thursday, August 28th. The stock was sold at an average price of $96.81, for a total transaction of $594,800.64. Following the transaction, the insider owned 11,923 shares in the company, valued at approximately $1,154,265.63. The trade was a 34.01% decrease in their position. The disclosure for this sale can be found here. Over the last quarter, insiders sold 267,213 shares of company stock worth $26,232,180. 6.30% of the stock is currently owned by insiders.

Institutional Trading of Charles Schwab

Hedge funds have recently modified their holdings of the company. Bain Capital Public Equity Management II LLC acquired a new position in shares of Charles Schwab in the first quarter valued at $79,605,000. Independent Advisor Alliance increased its holdings in Charles Schwab by 13.8% in the 1st quarter. Independent Advisor Alliance now owns 39,103 shares of the financial services provider's stock valued at $3,061,000 after buying an additional 4,754 shares during the period. Universal Beteiligungs und Servicegesellschaft mbH raised its stake in shares of Charles Schwab by 6.2% in the 1st quarter. Universal Beteiligungs und Servicegesellschaft mbH now owns 1,181,563 shares of the financial services provider's stock valued at $92,493,000 after buying an additional 68,858 shares in the last quarter. United Services Automobile Association lifted its holdings in shares of Charles Schwab by 14.1% during the 1st quarter. United Services Automobile Association now owns 39,512 shares of the financial services provider's stock worth $3,074,000 after acquiring an additional 4,869 shares during the period. Finally, World Investment Advisors boosted its position in shares of Charles Schwab by 7.6% during the 1st quarter. World Investment Advisors now owns 163,007 shares of the financial services provider's stock valued at $12,760,000 after acquiring an additional 11,505 shares in the last quarter. Institutional investors own 84.38% of the company's stock.

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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