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Charles Schwab
(NYSE:SCHW)
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Rating:80Outperform
Price Target:
$118.00
â–²(15.72% Upside)
Action:Reiterated
Date:07/21/26
SCHW scores well primarily on improving financial performance (strong margins, ROE, and robust cash generation) and positive technical momentum (price above key moving averages with bullish MACD). The latest earnings call reinforces the recovery with raised growth/NIM expectations, though higher expense growth and market/rate sensitivity temper upside. Valuation is reasonable but not compelling, and the low dividend yield provides limited support.
Positive Factors
Market Position & Scale
Dominant retail trading share and #1 status in daily trades/options provide structural advantages: scale lowers unit costs, improves routing/clearing economics, and sustains trading-related revenues and product distribution. Scale supports durable competitive positioning and network effects across retail and RIA channels.
Negative Factors
Market-Driven Revenue Sensitivity
A meaningful portion of revenue is tied to market activity and valuations, creating durable cyclicality. In sustained market downturns, trading volumes, market appreciation assumptions, and asset-based fees can compress revenue and margin despite scale, increasing earnings volatility over multi-quarter horizons.
Read all positive and negative factors
Positive Factors
Negative Factors
Market Position & Scale
Dominant retail trading share and #1 status in daily trades/options provide structural advantages: scale lowers unit costs, improves routing/clearing economics, and sustains trading-related revenues and product distribution. Scale supports durable competitive positioning and network effects across retail and RIA channels.
Read all positive factors
Charles Schwab Key Performance Indicators (KPIs)
Any
Income Before Taxes by Segment
Breaks down pre-tax profits by business line, highlighting the most profitable parts of the company and where cost or revenue pressures could hit overall earnings.
Breaks down pre-tax profits by business line, highlighting the most profitable parts of the company and where cost or revenue pressures could hit overall earnings.
Data provided by:
The Fly
The FlyCharles Schwab (SCHW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$183.03B
Dividend Yield1.12%
Average Volume (3M)10.36M
Price to Earnings (P/E)19.1
Beta (1Y)0.84
Revenue Growth11.20%
EPS Growth48.07%
CountryUS
Employees33,000
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)5.52
Shares Outstanding1,739,135,500
10 Day Avg. Volume9,146,739
30 Day Avg. Volume10,362,034
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)3.58
Price to Sales (P/S)6.40
P/FCF Ratio20.20
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$124.00Price Target Upside21.60% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
EPS Forecast (FY)6.5
Revenue Forecast (FY)$28.13B
Charles Schwab Business Overview & Revenue Model
Company Description
The Charles Schwab Corporation (SCHW) stands as a prominent financial services enterprise, delivering a comprehensive suite of offerings that encompass wealth management, securities trading and brokerage, banking services, asset administration, cu...
How the Company Makes Money
Schwab generates revenue from a mix of net interest income and fee-based income tied to brokerage, asset management, advisory, and banking activities. A major driver is net interest revenue: Schwab earns interest on interest-earning assets (includ...
Charles Schwab Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 15, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational and financial momentum: record revenue and EPS, significant new account and asset inflows, trading and lending growth, product innovation (crypto pilot, Forge, AI initiatives), and improved operating leverage. The main negatives are manageable near-term headwinds and uncertainties — higher expense growth this year (driven by volume and acquisitions), reliance on market-driven trading activity, subdued hard-to-borrow securities-lending, and uncertainty around tokenization and timing of emerging revenue streams. Overall, achievements and growth metrics substantially outweigh the challenges described.Positive Updates
Record Financial Results
2Q26 total revenue of $7.1 billion (+21% YoY) and adjusted EPS of $1.62 (+42% YoY); adjusted pre-tax profit margin of 54.3%.
Negative Updates
Higher Near-Term Expense Growth
Full-year expense growth raised to 9.5%–10.5% (vs prior underlying 5.5%–6.5%) driven by volume-related operating costs and inclusion of Forge (adds ~100 bps to expense growth).
Read all updates
Q2-2026 Updates
Positive
Negative
Record Financial Results
2Q26 total revenue of $7.1 billion (+21% YoY) and adjusted EPS of $1.62 (+42% YoY); adjusted pre-tax profit margin of 54.3%.
Read all positive updates
Company Guidance
Schwab updated its 2026 scenario, guiding to 17.5%–18.5% total revenue growth, full‑year net interest margin expanding to roughly 3.00%–3.10% (with a 4Q26 NIM exit of 3.25%–3.30%), a full‑year daily average trades assumption of 10.6 million (2Q26 was 11.9M), an assumed ~13% full‑year market appreciation, 5% organic asset‑gathering growth, and annual expense growth of 9.5%–10.5% (underlying expense growth 5.5%–6.5%); the update implies materially stronger operating leverage (about +800 bps versus the prior scenario), adjusted Tier‑1 leverage of ~6.75%–7.0% (6.8% at quarter end), and the financials exclude any opportunistic share repurchases in H2.Charles Schwab Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 30.03B | 27.68B | 26.00B | 25.52B | 22.31B | 19.00B |
| Gross Profit | 26.02B | 23.92B | 19.61B | 18.84B | 20.76B | 18.52B |
| EBITDA | 14.40B | 12.82B | 9.13B | 7.72B | 10.64B | 8.88B |
| Net Income | 10.10B | 8.85B | 5.94B | 5.07B | 7.18B | 5.86B |
Balance Sheet | ||||||
| Total Assets | 517.30B | 491.00B | 479.84B | 493.18B | 551.77B | 667.27B |
| Cash, Cash Equivalents and Short-Term Investments | 73.60B | 108.11B | 124.70B | 149.25B | 188.03B | 453.03B |
| Total Debt | 37.10B | 30.95B | 45.13B | 59.08B | 37.88B | 23.77B |
| Total Liabilities | 467.42B | 441.57B | 431.47B | 452.22B | 515.16B | 611.01B |
| Stockholders Equity | 49.88B | 49.42B | 48.38B | 40.96B | 36.61B | 56.26B |
Cash Flow | ||||||
| Free Cash Flow | 6.67B | 8.76B | 2.05B | 18.89B | 1.09B | 1.20B |
| Operating Cash Flow | 7.12B | 9.31B | 2.67B | 19.59B | 2.06B | 2.12B |
| Investing Cash Flow | 4.98B | 24.54B | 35.43B | 57.41B | 32.05B | -75.66B |
| Financing Cash Flow | 5.61B | -29.70B | -47.06B | -61.24B | -68.72B | 96.32B |
Charles Schwab Risk Analysis
Charles Schwab disclosed 19 risk factors in its most recent earnings report. Charles Schwab reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Charles Schwab Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $183.03B | 19.07 | 20.40% | 1.16% | 11.20% | 48.07% | |
78 Outperform | $33.81B | 15.05 | 24.51% | 1.25% | 7.75% | 12.12% | |
72 Outperform | $331.89B | 16.92 | 18.22% | 1.86% | 17.82% | 40.08% | |
70 Outperform | $39.20B | 34.78 | 20.51% | 0.36% | 16.12% | 31.49% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $28.29B | 28.09 | 18.45% | 0.37% | 38.82% | -14.48% | |
64 Neutral | $300.43B | 15.51 | 16.96% | 1.60% | 2.31% | 42.87% |
* Financial Sector Average
SCHW
Charles Schwab
106.35
11.12
11.68%
IBKR
Interactive Brokers
88.63
25.21
39.76%
LPLA
LPL Financial
354.24
-18.33
-4.92%
MS
Morgan Stanley
217.04
79.69
58.02%
RJF
Raymond James Financial
178.57
14.19
8.64%
GS
Goldman Sachs Group
1,052.98
346.30
49.00%
Charles Schwab Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Charles Schwab Issues $1 Billion Senior Notes Offering
Positive
Jun 29, 2026
On June 25, 2026, The Charles Schwab Corporation issued $1 billion of 4.603% fixed-to-floating rate senior notes due 2029, raising approximately $995.5 million in net proceeds after underwriting discounts and offering expenses. The notes were issu...
Executive/Board ChangesShareholder Meetings
Charles Schwab Shareholders Reelect Board, Governance Status Quo
Neutral
May 22, 2026
At its annual meeting of stockholders held on May 21, 2026, The Charles Schwab Corporation reported that all director nominees were elected with more votes in favor than against, reaffirming support for the existing board. Shareholders also approv...
Private Placements and Financing
Charles Schwab Raises $2.2 Billion Through Senior Notes
Positive
May 21, 2026
On May 21, 2026, The Charles Schwab Corporation issued $1.0 billion of 4.744% fixed-to-floating rate senior notes due 2030 and $1.25 billion of 5.493% fixed-to-floating rate senior notes due 2037, raising approximately $2.236 billion in net procee...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.