Charles Schwab Positions For 'More Robust EPS Growth': Analysts Weigh In On Q1 Results

Charles Schwab Corporation SCHW shares remained volatile in early trading on Tuesday, after the company reported its first-quarter earnings.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

JPMorgan On Charles Schwab
Analyst Kenneth Worthington reiterated an Overweight rating while raising the price target from $86 to $89.

Charles Schwab reported its first-quarter earnings at 74 cents per share, “a penny ahead of our expectation, with better net interest income and better cost management,” Worthington said in a note.

Expenses were lower in the first quarter, driven mainly by compensation, “as we think business efficiency efforts from late 2023 showed through,” the analyst wrote. “The final part of Ameritrade cost synergies remains on track for 2H24, setting up 2025 for another period of no- to low-expense growth,” he added.

Piper Sandler On Charles Schwab

Analyst Patrick Moley reiterated an Overweight rating while lifting the price target from $78 to $85.

Charles Schwab reported net revenues of $4.74 billion, “with NII, Asset Management, BDA fees & Trading revenues all beating our forecast,” Moley said. The firm delivered “all around solid metrics for March,” he added.

“April tax seasonality and the upcoming migration of SCHW's last tranche of legacy AMTD customers in May will likely weigh on transactional cash balances and NNA growth in the short term, but overall we feel SCHW is very close to the end of its cash sorting and AMTD related customer attrition issues,” the analyst further wrote.

Check out other analyst stock ratings.

Goldman Sachs On Charles Schwab

Analyst Alexander Blostein maintained a Neutral rating while raising the price target from $72 to $76.

“SCHW’s core deposits showed stability for the second month in a row, and while we expect deposits to decline amid April tax seasonality and any residual sorting over the next few months, we see a path to a more stable deposit base in 2H24,” Blostein wrote in a note.

Despite the “encouraging client KPIs and a more favorable macro backdrop,” the follow-through to average earning assets (AEA) growth may be limited “until wholesale funding balances are paid down,” the analyst stated. “Still, we continue to see NII inflecting higher, positioning SCHW to a more robust EPS growth from here,” he added.

Keefe, Bruyette & Woods On Charles Schwab

Analyst Kyle Voigt reaffirmed a Market Perform rating and price target of $75.

“Given strong levels of retail engagement across the industry, our expectation for improved NNA growth in March held true, with SCHW generating core NNA of $45 bln in March specifically,” Voigt said. The analyst added, however, that this was expected to “drive some modest growth in transactional sweep cash, while fell modestly in the month to $399 billion.

“We also expected SCHW to post strong growth in margin balances in March, and this also occurred with margin balances increasing to $68.1 bln at March-end, although this is already relatively in line with our 2Q24 average estimate of $68.3 bln,” Voigt further wrote.

SCHW Price Action: Shares of Charles Schwab are up 1.32% to $72.11 at the time of publication on Tuesday.

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