Charles Schwab, the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Craig Siegenthaler from Bank of America Securities maintained a Sell rating on the stock and has a $86.00 price target.
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Craig Siegenthaler has given his Sell rating due to a combination of factors impacting Charles Schwab’s financial outlook. Despite reporting an earnings per share that exceeded consensus expectations, the company’s net new assets, while improved, still linger at the lower end of its target range. This suggests that the growth in new assets is not as robust as desired, even in a favorable macroeconomic environment.
Additionally, Charles Schwab’s expenses have risen, driven by increased costs in professional services and compensation, which could pressure future profitability. Although there was a positive reduction in bank supplemental funding and a significant share buyback, these factors were not enough to offset concerns about the company’s expense management and growth trajectory. Consequently, the stock price objective is set below the current market price, reflecting a cautious outlook on its future performance.
Based on the recent corporate insider activity of 137 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SCHW in relation to earlier this year.