On Tuesday, Piper Sandler adjusted its outlook on Charles Schwab Corp (BVMF:SCHW34). (NYSE: SCHW) shares, increasing the price target to $78 from $70 while maintaining a Neutral rating. The decision followed Charles Schwab (NYSE:SCHW)’s fourth-quarter earnings report, which revealed stronger-than-anticipated revenue and lower expenses. According to InvestingPro data, 16 analysts have recently revised their earnings estimates upward, with price targets ranging from $68 to $98.
The financial services company reported net revenues of $5.33 billion for the fourth quarter of 2024, surpassing Piper Sandler’s estimate by $131 million, or 2.5%. Adjusted expenses for the same period were reported at $2.847 billion, which was $83 million, or 2.8%, lower than anticipated by the analysts. With a market capitalization of $146.35 billion and an impressive gross profit margin of 96.78%, Charles Schwab maintains a strong market position. InvestingPro analysis indicates the company’s overall financial health score is GOOD, reflecting robust operational efficiency.
Charles Schwab’s core net new assets (NNAs) showed significant growth, with $115 billion recorded in December 2024, marking a compound annual growth rate (CAGR) of 4.6%, and $61.4 billion for the fourth quarter, representing a CAGR of 7.1%. Additionally, transactional sweep cash balances saw a month-over-month increase of $25 billion in December, attributed to seasonal end-of-year tailwinds.
In light of these results, Piper Sandler has revised its earnings per share (EPS) estimates for Charles Schwab upwards by 6% for 2025 and 2% for 2026. The firm noted that the increase in the 2025 EPS estimate is primarily due to revenue guidance for the fiscal year that exceeded expectations.
Notable achievements include maintaining dividend payments for 36 consecutive years, with InvestingPro subscribers having access to detailed dividend analysis and additional financial insights through comprehensive Pro Research Reports.
The revised price target of $78 reflects the analyst’s updated assessment of Charles Schwab’s financial performance and growth prospects. The company’s strong fourth-quarter earnings and positive guidance for the upcoming fiscal years appear to have contributed to Piper Sandler’s decision.
In other recent news, Charles Schwab Corporation has been the focus of several analyst updates and financial developments. The company’s fourth-quarter performance was bolstered by an increase in net interest income and higher trading revenues, resulting in total revenue surpassing analyst forecasts.
Raymond (NSE:RYMD) James has expressed confidence in the financial services firm, raising its price target from $86 to $88 while retaining an Outperform rating. This adjustment comes after the company’s optimistic fourth-quarter results and initial outlook for 2025, suggesting potential upward revisions to both Raymond James’ and consensus earnings per share estimates.
Charles Schwab has also seen improvements in net new asset and account growth, signaling a more favorable future performance. Furthermore, the anticipated paydown of Schwab Bank’s high-cost funding by the end of 2025 is likely to result in a significant boost to the net interest margin and earnings per share. This positive forecast is further supported by the company’s impressive gross profit margin of 96.78% and a solid financial health score.
On the analyst front, Truist Securities has initiated coverage on Charles Schwab with a Buy rating and an $85 price target, highlighting the company’s strong revenue growth potential. Barclays (LON:BARC) has upgraded the company’s stock from Equal Weight to Overweight, raising the price target to $95. These upgrades suggest a growing confidence in Schwab’s financial trajectory.
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