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On Monday, JMP Securities analysts reaffirmed their positive stance on Charles Schwab Corporation (NYSE:SCHW), maintaining a Market Outperform rating and a price target of $94.00. According to InvestingPro data, analyst targets currently range from $70 to $105, with the stock trading at $77.11. The company appears slightly undervalued based on InvestingPro’s Fair Value analysis. The financial services firm, known for its brokerage and banking services, has recently demonstrated strong performance metrics for February, with notable year-over-year growth in net new assets.
The analysts highlighted Charles Schwab’s impressive February metrics, emphasizing the substantial increase in net new assets, which surged by $48 billion. This marked a significant 44% increase compared to the previous year and represented an annualized net new asset growth rate of 5.7%. The company’s strong performance is reflected in its recent market performance, with InvestingPro data showing an 8.24% return over the past week and a 21.6% gain over the last six months. The robust asset inflow is a clear indicator of the company’s strong client acquisition and retention.
Additionally, Charles Schwab saw a moderate rise in customer cash balances, which grew by $4.7 billion in February, a 1% increase from January figures. InvestingPro analysis reveals two key insights: the company has maintained dividend payments for 37 consecutive years, and it’s currently trading at a relatively high P/E ratio of 25.82x relative to near-term earnings growth. InvestingPro subscribers have access to 6 additional exclusive tips about SCHW’s financial health and growth prospects. This uptick in customer cash balances is a positive reversal from January’s $19 billion decline, which followed a strong increase in December when balances rose by $25 billion.
The analyst’s commentary underscored the company’s ability to deliver across all fronts, meeting expectations for a solid month. The focus on net new assets, a key metric for investor interest, was particularly satisfying for analysts, as it showcased robust growth.
Charles Schwab’s performance is a reflection of the broader trends in the financial sector, where client assets and cash balances are closely watched indicators of a firm’s health and growth prospects. With a market capitalization of $139.84 billion and revenue growth of 3.55%, the company maintains a solid market position. By maintaining a Market Outperform rating and a $94.00 price target, JMP Securities signals confidence in Charles Schwab’s continued success and market position. For deeper insights into SCHW’s valuation and growth metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Charles Schwab Corporation reported a 44% year-over-year increase in core net new assets for February 2025, totaling $48.0 billion. The company’s total client assets reached $10.28 trillion, a 16% rise from the previous year, although there was a slight 1% decrease from January. In January, Schwab saw a 75% increase in new assets, amounting to $30.6 billion, with total client assets at $10.33 trillion, marking a 21% increase from the previous year. Additionally, Charles Schwab completed a $13.1 billion stock sale, involving the sale of shares held by TD Group US Holdings LLC, marking TD’s exit from its position in the company.
Keefe, Bruyette & Woods maintained an Outperform rating for Charles Schwab, with a price target of $93.00, following TD Bank’s announcement to sell its remaining 10.1% stake in the company. Concurrently, Charles Schwab agreed to buy back $1.5 billion worth of shares from TD, part of a broader strategy to continue buybacks throughout 2025. Truist Securities also lifted its price target for Schwab’s stock to $91, maintaining a Buy rating, and adjusted its earnings per share estimates for 2025 and 2026. These developments reflect Charles Schwab’s ongoing strategic initiatives and financial performance in the current market landscape.
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