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On Wednesday, JPMorgan analyst Kenneth Worthington reiterated an Overweight rating and a $92.00 price target on Charles Schwab Corp (BVMF:SCHW34). (NYSE: SCHW) shares, which currently trades at $77.19. According to InvestingPro data, analysts’ targets range from $65 to $102, with 16 analysts recently revising their earnings expectations upward for the upcoming period. Ahead of the company’s earnings report set for Thursday, Worthington highlighted the robustness of Schwab’s earnings model and the potential positive effects of customers’ increasing cash allocations on the company’s financial performance.
Worthington expressed confidence in the stock as the company approaches its earnings announcement. He anticipates that Charles Schwab (NYSE:SCHW) will report another month of positive customer cash balance growth for March. This increase is expected to enable the company to further reduce Short-Term Borrowing, which would bolster the Net Interest Margin (NIM), a key profitability indicator for financial firms. The company has demonstrated strong financial performance with a gross profit margin of 97% and has maintained dividend payments for 37 consecutive years, as revealed by InvestingPro analysis.
Despite expectations that Net New Asset (NNA) growth may not match the strong figures from February, the analyst sees promising developments. The recent launch of Schwab’s Alternative OneSource, just last week, is seen as a factor that could drive Return On Client Assets (ROCA) growth and lead to improved NNA outcomes.
Charles Schwab’s strategic moves, such as the introduction of Alternative OneSource, are part of the company’s efforts to enhance its offerings and attract more client assets. These initiatives are expected to contribute positively to the company’s earnings and overall financial health.
Investors are looking forward to Charles Schwab’s earnings report on Thursday, which will provide further insight into the company’s financial performance and the impact of its strategic initiatives on its earnings power. The reiteration of the Overweight rating and price target by JPMorgan reflects a positive outlook for the company’s stock as it continues to navigate the financial landscape. With a market capitalization of $140 billion and trading at a P/E ratio of 25.9x, InvestingPro analysis suggests the stock is currently slightly undervalued, with additional insights available in the comprehensive Pro Research Report covering this leading financial services provider.
In other recent news, Charles Schwab Corporation reported a 44% year-over-year increase in core net new assets for February 2025, totaling $48 billion. The company’s total client assets reached $10.28 trillion, reflecting a 16% rise from the previous year. Additionally, Charles Schwab saw a 1% month-over-month increase in daily average trades, reaching 7.45 million. Morgan Stanley (NYSE:MS) upgraded Charles Schwab’s stock rating from Equal-weight to Overweight, highlighting the company’s potential for a 20% compound annual growth rate in earnings per share over the next two years. Meanwhile, Raymond (NSE:RYMD) James raised its price target for Charles Schwab shares to $90, citing anticipated improvements in net interest margin and earnings per share. JMP Securities maintained a Market Outperform rating with a price target of $94, noting the company’s strong performance metrics, including a 44% increase in net new assets in February. The company also reported a significant 75% increase in new assets for January, amounting to $30.6 billion. These developments underscore Charles Schwab’s robust growth in client assets and its strategic positioning in the financial services sector.
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