🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Charles Schwab share target raised by TD Cowen on growth potential

EditorEmilio Ghigini
Published 16/04/2024, 13:52
SCHW
-

On Tuesday, TD Cowen increased its price target for Charles Schwab Corporation (NYSE:SCHW) shares to $92 from the previous target of $87. The firm has sustained its Buy rating on the stock.

The adjustment comes as the analyst anticipates significant growth potential for the company's earnings, driven by a combination of factors, including the peak in client sorting, an uptick in Net New Assets (NNA) growth, and the continued benefits from the synergies of the AMTD/Schwab merger.

The analyst provided insights on the earnings forecast, adjusting the 2024 adjusted earnings per share (EPS) estimate slightly downwards by $0.07 to $3.39. This revision accounts for the balance sheet versus net interest margin dynamics. However, for the years 2025 and 2026, the estimates have been raised by over 7%, to $4.62 and $5.70 respectively. The new 12-month sum-of-the-parts-derived price target of $92 reflects this increased earnings outlook.

The report from TD Cowen indicates that despite the revisions for the years 2025 and 2026, the model remains conservative in key areas. This suggests that there could be further potential upside for Charles Schwab's earnings. The analyst describes the company's earnings as being "coiled like a spring," ready to expand measurably.

The positive outlook is attributed to the ongoing integration and synergy realization following the merger between TD Ameritrade and Charles Schwab. This strategic move is expected to continue to bear fruit, contributing to the company's financial performance and growth trajectory in the coming years.

InvestingPro Insights

In light of TD Cowen's updated price target for Charles Schwab Corporation (NYSE:SCHW), real-time data from InvestingPro provides additional context for investors considering the stock. With a market capitalization of $130.13 billion and a P/E ratio that has adjusted to 24.74 over the last twelve months as of Q4 2023, Schwab's financials warrant attention. The company's Price/Book ratio, standing at 4.1, suggests a premium valuation compared to the book value of its assets.

InvestingPro Tips highlight some cautionary points: analysts have recently revised their earnings expectations downwards for the upcoming period, and the company's short-term obligations currently exceed its liquid assets. However, on a more positive note, Charles Schwab has a strong track record of maintaining dividend payments for 36 consecutive years, underscoring its commitment to shareholder returns. Additionally, the stock has experienced a significant price uptick over the last six months, with a 35.88% total return, and is trading near its 52-week high.

For investors seeking a deeper analysis, there are additional InvestingPro Tips available for Charles Schwab, which can be found at https://www.investing.com/pro/SCHW. To enrich your investment strategy with these insights, use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 5 more tips waiting to guide your investment decisions on InvestingPro.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.