QQQ   423.41 (-0.57%)
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XOM   118.52 (-0.09%)
QQQ   423.41 (-0.57%)
AAPL   167.04 (-0.57%)
MSFT   404.27 (-1.84%)
META   501.80 (+1.54%)
GOOGL   156.01 (+0.35%)
AMZN   179.22 (-1.14%)
TSLA   149.93 (-3.55%)
NVDA   846.71 (+0.76%)
AMD   155.08 (+0.69%)
NIO   4.00 (+2.30%)
BABA   68.88 (+0.09%)
T   16.33 (+1.30%)
F   12.06 (+0.17%)
MU   111.93 (-3.78%)
GE   152.94 (-1.75%)
CGC   7.83 (+20.65%)
DIS   112.43 (-0.45%)
AMC   2.92 (-2.01%)
PFE   25.39 (-0.12%)
PYPL   62.10 (-1.83%)
XOM   118.52 (-0.09%)
QQQ   423.41 (-0.57%)
AAPL   167.04 (-0.57%)
MSFT   404.27 (-1.84%)
META   501.80 (+1.54%)
GOOGL   156.01 (+0.35%)
AMZN   179.22 (-1.14%)
TSLA   149.93 (-3.55%)
NVDA   846.71 (+0.76%)
AMD   155.08 (+0.69%)
NIO   4.00 (+2.30%)
BABA   68.88 (+0.09%)
T   16.33 (+1.30%)
F   12.06 (+0.17%)
MU   111.93 (-3.78%)
GE   152.94 (-1.75%)
CGC   7.83 (+20.65%)
DIS   112.43 (-0.45%)
AMC   2.92 (-2.01%)
PFE   25.39 (-0.12%)
PYPL   62.10 (-1.83%)
XOM   118.52 (-0.09%)
QQQ   423.41 (-0.57%)
AAPL   167.04 (-0.57%)
MSFT   404.27 (-1.84%)
META   501.80 (+1.54%)
GOOGL   156.01 (+0.35%)
AMZN   179.22 (-1.14%)
TSLA   149.93 (-3.55%)
NVDA   846.71 (+0.76%)
AMD   155.08 (+0.69%)
NIO   4.00 (+2.30%)
BABA   68.88 (+0.09%)
T   16.33 (+1.30%)
F   12.06 (+0.17%)
MU   111.93 (-3.78%)
GE   152.94 (-1.75%)
CGC   7.83 (+20.65%)
DIS   112.43 (-0.45%)
AMC   2.92 (-2.01%)
PFE   25.39 (-0.12%)
PYPL   62.10 (-1.83%)
XOM   118.52 (-0.09%)

Buy The Dip In The Charles Schwab Corporation 

Charles Schwab stock price

Key Points

  • Execs and analysts defend the Charles Schwab Company despite share plunge. 
  • Business is insulated from risks that led to SVBs' demise. 
  • Price action may fall in the near term, but this is a buying opportunity for long-term investors. 
  • 5 stocks we like better than Charles Schwab

Shares of The Charles Schwab Corporation NYSE: SCHW are falling along with the broader financial sector due to fallout from the SVB issue, but it is getting thrown out with the bathwater. This company may have some systemic risk to issues within the broader financial industry, but its model is far different than SVB, and its problems, if they can be called such, lay in other areas.

Regarding the business model, about 80% of the deposits at The Charles Schwab Corporation are FDIC insured, while it was estimated that roughly the same amount of SVBs business was uninsured. The salient point is that analysts are upgrading the stock due to the rapid decline in share prices, opening an opportunity for investors to buy the dip

The latest is from Citigroup NYSE: C, which upped the stock to Buy from Hold. They don’t see the risk of withdrawals or bank runs associated with SVBs downfall and trading at 15X its earnings; it is a value. They estimate the stock is down 30% from its historical valuation, which suggests that growth and multiple expansion are on the table. 

Morgan Stanley NYSE: MS is another recent supporter of the name, citing the new FOMC funding facility as beneficial. Morgan Stanley analysts have the stock pegged at Overweight with a $99 price target compared to Citigroup’s $78 and the Marketbeat.com consensus of $90. The $90 consensus is down a little on a YOY basis and has shown some volatility but is relatively flatter than not. Even the low price target of $60 offers about a 15% upside, with shares down another 10% from their recent peak. 

The Charles Schwab Company, A Victim Of Circumstance? 

The Charles Schwab Company’s decline began on March 9 when a report JPMorgan had brokered or attempted to broker a large block trade in SCHW shares. The trade, worth 8.5 million shares at a price between $73 and $74, came in tandem with growing uneasiness related to Silicon Valley Bank and Silvergate Bank, so met a market ready to sell. That was compounded by the subsequent collapse of SVB, which has the entire financial sector moving lower. 


Schwab execs have come out in defense of the company. According to them, the company is well-capitalized and has access to multiple short-term lending facilities. The company has access to about $400 billion in cash flow and borrowing capacity, which is ample to get through this rough patch. The company also reiterated its guidance, although the outlook is a bit shy of the Marketbeat.com analysts' consensus estimates. 

“All of these factors demonstrate that Schwab is well-positioned to navigate the current environment as we continue to serve clients and build the future of modern wealth management. And we applaud the efforts of our regulators to support depositors during this critical time, helping to bolster confidence across the American banking system,” said the company in its statement.

The Technical Outlook: The Charles Schwab Corporation Falls To Pandemic Low 

The price action in SCHW fell more than 35% this month alone and may fall further, but there are signs of buying at the new lows. If the market can sustain this level, consistent with the 2018/2019 highs, it can form a base and prepare for recovery. If not, this stock may continue lower and retest support at the $30 level. 

Should you invest $1,000 in Charles Schwab right now?

Before you consider Charles Schwab, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Charles Schwab wasn't on the list.

While Charles Schwab currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

13 Stocks Institutional Investors Won't Stop Buying Cover

Which stocks are major institutional investors including hedge funds and endowments buying in today's market? Click the link below and we'll send you MarketBeat's list of thirteen stocks that institutional investors are buying up as quickly as they can.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Citigroup (C)
4.89 of 5 stars
$58.32+0.3%3.64%17.25Moderate Buy$62.91
Morgan Stanley (MS)
4.7883 of 5 stars
$90.26+0.2%3.77%16.44Hold$96.13
Charles Schwab (SCHW)
4.5626 of 5 stars
$72.93+0.6%1.37%30.51Hold$74.47
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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