Charles Schwab near-term guidance softer than expected, says Morgan Stanley

Morgan Stanley came away from Charles Schwab’s 2024 investor day with a number takeaways, noting that near-term guidance was a bit softer than expected as the company offered that Q2 EPS is unlikely to be higher than Q1. Heading into the event, expectations were for limited guidance updates as management previously suggested they would next update guidance in July, but a few unexpected expense items led management to update near-term expectations and investors found this disappointing given prior discussion and expectations of improving earnings trajectory throughout 2024, the analyst says. While the near-term guidance was softer than expected, the firm sees a “strong” 19% EPS CAGR thru 2026, adds the analyst, who has an Equal Weight rating and $73 price target on Schwab shares.