Devin Ryan of JMP Securities has upgraded his outlook for Charles Schwab Corp. (NYSE:SCHW), moving from ‘Market Perform’ to ‘Outperform,’ citing recent stabilization in ‘cash sorting’— a trend where clients shift funds from low-yielding accounts to more profitable assets. Ryan believes this stabilization will lend some relief in valuation for Schwab, a company that’s felt the extreme effects of cash sorting. This caused SCHW stock to jump at the time of writing.
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Additionally, Ryan suggests Schwab’s Q2 guidance indicating softer performance could actually be beneficial, putting earnings valuations in a more favorable light with downward revisions now in the past. Schwab, he says, is poised for an interesting upswing into the low $70 range, and his $73 price target reflects an approximated 19x P/E multiple on JMP’s 2024 EPS for Schwab.
Overall, analysts have a Moderate Buy consensus rating on SCHW stock based on 13 Buys, two Holds, and two Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average price target of $64.83 per share implies 12.61% upside potential.