Charles Schwab (NYSE:SCHW) Sets New 1-Year High - Time to Buy?

Key Points

• Charles Schwab reached a new 52-week high of $107.68, supported by analyst upgrades and a broadly “Moderate Buy” consensus rating. Analysts’ average price target is $121.17, although one firm downgraded the stock to “market perform.”
• Recent quarterly results exceeded expectations, with EPS of $1.62 versus $1.56 expected and revenue of $7.07 billion versus $6.90 billion forecast. Revenue grew 20.9% year over year, reinforcing the company’s growth outlook.
• Investors should weigh the upside against valuation and insider selling: Schwab trades at roughly 19.6 times earnings, while insiders sold about $37.9 million of shares last quarter. The company also declared a quarterly dividend of $0.32, yielding approximately 1.2%.

Shares of The Charles Schwab Corporation (NYSE:SCHW - Get Free Report) reached a new 52-week high during trading on Wednesday . The company traded as high as $107.68 and last traded at $107.17, with a volume of 349199 shares traded. The stock had previously closed at $106.35.

More Charles Schwab News

Here are the key news stories impacting Charles Schwab this week:

• Positive Sentiment: Analyst upgrades support the shares: Compass Point upgraded Charles Schwab to “strong buy” after initiating coverage with a “buy” recommendation, adding to Wall Street’s moderately optimistic outlook. Compass initiates coverage of Charles Schwab with Buy recommendation
• Positive Sentiment: Strong earnings remain a key support: Charles Schwab’s recent quarterly report exceeded expectations, with earnings per share of $1.62 versus a $1.56 consensus estimate and revenue of $7.07 billion versus $6.90 billion expected. Revenue increased 20.9% year over year, reinforcing the business-growth narrative behind the stock’s recent rally. Why Charles Schwab Stock Jumped in July
• Positive Sentiment: Retail clients have become more bullish: Schwab’s Q3 sentiment report found that 47% of retail clients are bullish on U.S. stocks, despite concerns that the market may be overvalued. Greater confidence and willingness to buy market dips could support trading activity, asset flows and Schwab’s client engagement. Schwab Q3 Retail Client Sentiment Report
• Positive Sentiment: Dividend and platform enhancements add investor appeal: Schwab declared a regular quarterly dividend of $0.32 per common share. Separately, Orion introduced fractional-share trading for advisors using Schwab Advisor Services, allowing more precise portfolio implementation and potentially strengthening the custody platform’s appeal. Charles Schwab Dividend and Retail Sentiment
• Neutral Sentiment: Valuation is viewed favorably but not universally: One analysis suggests SCHW remains below estimated intrinsic value despite a 69.3% three-year return, while analysts broadly remain only moderately optimistic. This leaves upside potential, but also raises the risk that strong business performance is already reflected in the stock. Charles Schwab Stock Valuation
• Neutral Sentiment: Schwab’s planned $11.7 million Scottsdale office renovation signals continued investment in its operations, though the spending is unlikely to materially affect near-term earnings. Scottsdale Office Renovations

Wall Street Analysts Forecast Growth

Several equities research analysts recently issued reports on SCHW shares. Keefe, Bruyette & Woods began coverage on Charles Schwab in a report on Wednesday, April 8th. They issued an "outperform" rating and a $110.00 price objective on the stock. Argus lifted their price target on Charles Schwab from $108.00 to $114.00 and gave the stock a "buy" rating in a research note on Thursday, July 23rd. Zacks Research upgraded Charles Schwab from a "hold" rating to a "strong-buy" rating in a research report on Thursday, July 9th. Deutsche Bank Aktiengesellschaft restated a "buy" rating on shares of Charles Schwab in a report on Wednesday, July 22nd. Finally, BMO Capital Markets lowered shares of Charles Schwab from an "outperform" rating to a "market perform" rating and set a $105.00 price target on the stock. in a research report on Monday, July 20th. Two analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, Charles Schwab currently has a consensus rating of "Moderate Buy" and a consensus target price of $121.17.

Charles Schwab Stock Performance

The company has a current ratio of 0.62, a quick ratio of 0.62 and a debt-to-equity ratio of 0.48. The stock has a market capitalization of $187.31 billion, a price-to-earnings ratio of 19.58, a price-to-earnings-growth ratio of 0.81 and a beta of 0.76. The firm's fifty day moving average price is $95.98 and its 200 day moving average price is $95.51.

Charles Schwab (NYSE:SCHW - Get Free Report) last posted its earnings results on Tuesday, July 21st. The financial services provider reported $1.62 earnings per share for the quarter, beating the consensus estimate of $1.56 by $0.06. Charles Schwab had a net margin of 38.79% and a return on equity of 24.73%. The firm had revenue of $7.07 billion during the quarter, compared to the consensus estimate of $6.90 billion. During the same quarter last year, the firm earned $1.14 EPS. The firm's revenue for the quarter was up 20.9% on a year-over-year basis. Analysts forecast that The Charles Schwab Corporation will post 6.46 EPS for the current fiscal year.

Charles Schwab Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Friday, August 28th. Investors of record on Friday, August 14th will be issued a $0.32 dividend. This represents a $1.28 annualized dividend and a dividend yield of 1.2%. The ex-dividend date is Friday, August 14th. Charles Schwab's payout ratio is currently 23.27%.

Insider Activity

In related news, insider Dennis Howard sold 28,000 shares of the firm's stock in a transaction dated Tuesday, July 28th. The stock was sold at an average price of $105.01, for a total transaction of $2,940,280.00. Following the completion of the transaction, the insider directly owned 10,470 shares in the company, valued at $1,099,454.70. This trade represents a 72.78% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Chairman Walter W. Bettinger sold 192,488 shares of the business's stock in a transaction dated Monday, July 27th. The stock was sold at an average price of $103.90, for a total transaction of $19,999,503.20. Following the sale, the chairman owned 529,346 shares in the company, valued at $54,999,049.40. This trade represents a 26.67% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 363,848 shares of company stock worth $37,874,706 in the last quarter. Insiders own 6.30% of the company's stock.

Hedge Funds Weigh In On Charles Schwab

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Brookwood Investment Group LLC grew its stake in shares of Charles Schwab by 192.6% during the fourth quarter. Brookwood Investment Group LLC now owns 12,236 shares of the financial services provider's stock worth $1,222,000 after purchasing an additional 8,054 shares in the last quarter. Geode Capital Management LLC raised its stake in Charles Schwab by 0.3% in the fourth quarter. Geode Capital Management LLC now owns 37,667,640 shares of the financial services provider's stock valued at $3,747,646,000 after buying an additional 98,242 shares in the last quarter. Swiss Life Asset Management Ltd lifted its holdings in Charles Schwab by 4.2% during the 4th quarter. Swiss Life Asset Management Ltd now owns 407,179 shares of the financial services provider's stock worth $40,681,000 after buying an additional 16,482 shares during the last quarter. Juno Financial Group LLC acquired a new position in shares of Charles Schwab during the 4th quarter worth about $2,591,000. Finally, Busey Bank increased its holdings in shares of Charles Schwab by 15.5% in the 4th quarter. Busey Bank now owns 258,962 shares of the financial services provider's stock valued at $25,873,000 after acquiring an additional 34,745 shares during the last quarter. Hedge funds and other institutional investors own 84.38% of the company's stock.

About Charles Schwab

Charles Schwab Corporation NYSE: SCHW is a diversified financial services firm that provides brokerage, banking, wealth management and advisory services to individual investors, independent investment advisors and institutional clients. Its primary offerings include retail brokerage accounts, online trading platforms, Schwab-branded mutual funds and exchange-traded funds (ETFs), retirement plan services, custodial services for independent Registered Investment Advisors (RIAs), and banking products through Charles Schwab Bank.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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