Positive Outlook for Charles Schwab: Buy Rating Backed by Strong Fundamentals and Growth Prospects

William Blair analyst Jeff Schmitt has maintained their bullish stance on SCHW stock, giving a Buy rating on June 10.

Jeff Schmitt has given his Buy rating due to a combination of factors that indicate a positive outlook for Charles Schwab. The company’s fundamentals are showing signs of improvement, with organic growth returning to historical norms and a significant year-over-year increase in sweep cash. This improvement has allowed Charles Schwab to reduce its reliance on supplemental funding, which has decreased from $38 billion in March to $32 billion, and was once over $90 billion.
Furthermore, the current risk-on environment has resulted in strong investor engagement and a recovery in margin balances. If the Federal Reserve resumes easing, it is expected that sweep cash will continue to increase, potentially leading to further reductions in short-term funding needs. These factors are anticipated to positively impact earnings, with the company projected to achieve a 30% growth in EPS by 2025. This optimistic financial trajectory underpins Schmitt’s confidence in rating Charles Schwab as a Buy.

Schmitt covers the Financial sector, focusing on stocks such as StoneX Group, Charles Schwab, and LPL Financial. According to TipRanks, Schmitt has an average return of 11.1% and an 80.95% success rate on recommended stocks.

In another report released on June 10, Jefferies also maintained a Buy rating on the stock with a $88.00 price target.