Bullish indicating open at $55-$60, IPO prices at $37
Tuesday, Charles Schwab Corp. (NYSE:SCHW) shares maintained their Outperform rating with a steady price target of $93.00, as confirmed by Keefe, Bruyette & Woods. The firm’s analyst, Kyle Voigt, reiterated the rating following news that TD Bank intends to sell its remaining 10.1% stake in SCHW. Voigt noted that while the decision to sell was anticipated, the timing of such a move had not been previously disclosed.
On Tuesday morning before the market opened, TD Bank announced the launch of a secondary offering to sell its remaining stake in Charles Schwab, consisting of approximately 184.7 million shares, valued at an estimated $15.4 billion based on the closing price from Friday. As part of this transaction, Charles Schwab has agreed to buy back $1.5 billion worth of shares directly from TD through a private transaction, which will be financed using available cash. With a market capitalization of $148.59 billion and a strong financial health score of "GOOD" according to InvestingPro, the company appears well-positioned to execute this buyback.
The repurchase represents about 1.0% of Charles Schwab’s total shares outstanding, a significant reduction from TD Bank’s current 10.1% stake. This strategic move by SCHW is part of a broader plan to continue buybacks throughout 2025, as the company aims to meet its key financial objectives. Charles Schwab’s announcement indicated that it will seek opportunistic repurchases that align with its financial goals for the year.
The transaction is expected to benefit Charles Schwab by reducing the number of shares outstanding, which could potentially increase earnings per share and shareholder value. Additionally, the buyback aligns with the company’s previously stated intentions to engage in share repurchases as opportunities arise.
Charles Schwab’s commitment to opportunistic buybacks throughout 2025 is indicative of the company’s confidence in its financial strategy and its dedication to enhancing shareholder returns. The company has maintained dividend payments for 37 consecutive years, demonstrating a strong commitment to shareholder value. The stock’s performance and the firm’s financial objectives will continue to be closely monitored by investors and analysts alike. For deeper insights into SCHW’s valuation and growth prospects, including 11 additional analyst revisions and exclusive financial metrics, explore the comprehensive research available on InvestingPro.
In other recent news, Charles Schwab Corp (BVMF:SCHW34). has been in the spotlight after Truist Securities increased its stock target to $91 and maintained a Buy rating. This followed the announcement of TD Bank’s divestment of its 10% stake in Schwab, with Schwab participating through a $1.5 billion buyback. The buyback amount, representing about 1% of Schwab’s market capitalization, is double what had been anticipated for the first quarter of 2025. As a result, Truist Securities increased its earnings per share (EPS) estimate for Charles Schwab by 1% for both 2025 and 2026.
In tandem with TD Bank’s divestment, the bank unveiled plans to initiate a stock buyback following the sale of its equity investment in Schwab. TD Bank’s exit from Schwab was influenced by the substantial return on the shares acquired in 2020, with C$8 billion earmarked for the repurchase of TD stock.
Additionally, Charles Schwab’s stock has received attention from Wolfe Research and Jefferies. Wolfe Research reiterated its Outperform rating with a steady price target of $100, citing a 23% upside potential. Jefferies also maintained a positive stance, affirming a Buy rating and a price target set at $95. These recent developments underscore the evolving financial landscape for Charles Schwab and TD Bank.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.