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Investing.com - Citizens has reiterated its Market Outperform rating and $110.00 price target on Charles Schwab Corp. (NYSE:SCHW), citing expectations for a strong quarterly performance. The $170 billion market cap company currently shows promising signals, with InvestingPro data revealing 7 analysts have revised their earnings estimates upward for the upcoming period.
The firm projects Charles Schwab will exceed consensus estimates, forecasting earnings of $1.23 per share versus the $1.22 consensus. This outperformance is expected to be driven by better-than-modeled retail trading engagement and higher market prices positively impacting average balance billing. The company’s strong fundamentals are reflected in its perfect Piotroski Score of 9, according to InvestingPro analysis.
Citizens notes that while average interest-earning asset balances appear set to decline slightly, the mix has been improving with increased high-yielding margin balances and solid pledged asset loan growth. The firm believes Charles Schwab can achieve its previously guided fourth-quarter net interest margin expansion "well into the 280s bps range."
Charles Schwab shares rose less than 5% in the third quarter but have gained 27% year-to-date, making it one of the best performers in 2025. The recent performance stall is attributed to the Federal Reserve beginning to adjust interest rates and slight decreases in transactional cash balances. Trading at a PEG ratio of 0.46, the stock appears attractively valued relative to its growth prospects. For deeper insights into Charles Schwab’s valuation and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports.
The firm maintains that Charles Schwab’s intermediate-term earnings power trajectory remains strong, citing the company’s continued reduction of short-term funding while experiencing strong customer traction across trading volumes, margin balances, securities-based lending revenue, and net new assets. The company’s commitment to shareholder returns is evidenced by its 37-year track record of consecutive dividend payments, with the current dividend yield at 1.15%.
In other recent news, Charles Schwab announced the launch of Schwab Private Issuer Equity Services, a new equity management solution tailored for late-stage private companies considering public offerings. This initiative aims to equip private firms with sophisticated equity management capabilities akin to those available to public companies. In addition, Charles Schwab plans to expand its branch network by adding 16 new locations and either relocating or expanding 25 existing branches across the United States. This expansion will also create more than 400 new jobs, including roles for financial and wealth consultants.
On the analyst front, BMO Capital initiated coverage on Charles Schwab with an Outperform rating and a price target of $110.00, attributing this to the company’s improving balance sheet. Similarly, Truist Securities reiterated its Buy rating for Charles Schwab, maintaining a price target of $112.00 as the company approaches the third-quarter earnings season. Additionally, Charles Schwab will host a Fall Business Update for institutional investors on October 16, featuring presentations from key executives. These developments highlight the company’s ongoing strategic initiatives and the positive sentiment from analysts.
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