Fed’s new funding program a positive for Charles Schwab, says Morgan Stanley

Morgan Stanley notes that Charles Schwab (SCHW) shares traded down 24% last week on cash sorting and deposit withdrawal concerns and perceived negative read-across from what the firm sees as the "idiosyncratic challenges" facing other financial institutions like SVB Financial (SIVB). However, the firm continues to believe the price action in Schwab is "overdone" and views the Fed’s announcement on Sunday evening that it will make available additional funding to banks though the creation of a new Bank Term Funding Program as a positive for the company as it provides another source of liquidity beyond FHLB borrowing capacity and eliminates a need for them to sell their securities portfolio, potentially at a loss, to meet customer withdrawals demands. Morgan Stanley maintains an Overweight rating and $99 price target on Charles Schwab shares.