Brokerage firm Charles Schwab (NYSE:SCHW) is scheduled to report fourth-quarter 2022 earnings on January 18, before the market opens. The company’s top line is expected to have benefitted from higher interest rates and an increase in banking accounts during the quarter.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Currently, the Street expects Charles Schwab to post earnings of $1.1 per share in Q4, compared with $0.86 in the prior-year period. Meanwhile, revenue expectations are pegged at $5.6 billion, representing a year-over-year jump of about 19.1%.
Key Factors Impacting Q4 Results
Net interest income (NII) accounts for about 60% of Charles Schwab’s total revenues. Thus, rising rates might have continued to support revenues as the company earns interest over the client’s cash balances. Also, the company’s monthly report indicates growth in banking accounts in Q4, which bodes well for non-interest revenue.
On the flip side, the company’s trading revenues are likely to be impacted by the trading slump during the quarter on fears of a looming recession and other macro challenges.
Is SCHW a Good Stock to Buy?
The stock has a Strong Buy consensus rating based on 10 Buys and three Holds. The average SCHW stock price target of $95 implies 14.5% upside potential. The stock has gained nearly 23% in the past three months.
