Christopher Allen, an analyst from Citi, maintained the Buy rating on Charles Schwab (SCHW – Research Report). The associated price target remains the same with $102.00.
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Christopher Allen has given his Buy rating due to a combination of factors including Charles Schwab’s strong performance metrics and strategic initiatives. In April, the company reported core net new assets (NNA) of $2.7 billion, aligning with the expected seasonal patterns related to client tax disbursements. Additionally, Schwab experienced a significant increase in new brokerage account openings, with approximately 439,000 new accounts, despite market volatility.
Allen also noted that trading activity remained strong, with daily average trades up 14% sequentially and 46% year-over-year. Although there was a seasonal decline in transactional sweep cash due to tax-related outflows, the overall metrics slightly exceeded expectations. Looking forward, Allen is optimistic about Schwab’s improving cash trends, efforts to enhance NNA growth to a historical range of 5-7%, and potential for increased capital returns. These factors contribute to Schwab being considered the most favorable option in the brokerage sector, offering the best risk/reward balance at current valuations.
In another report released yesterday, Investec also maintained a Buy rating on the stock with a $97.00 price target.