Charles Schwab (SCHW)
NYSE:SCHW
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Charles Schwab
(NYSE:SCHW)
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Rating:74Outperform
Price Target:
$107.00
â–²(12.87% Upside)
Action:UpgradedDate:03/24/26
The score is driven primarily by strong financial fundamentals (high profitability, improved leverage, and solid 2025 cash generation) and a bullish earnings outlook with clear 2026 growth and margin targets plus reduced rate sensitivity. These strengths are moderated by mixed technical momentum and only moderate valuation support (P/E ~20 with a modest ~1.19% yield).
Positive Factors
Scale & Market Leadership
Market-leading scale — ~46M accounts and ~ $12T assets — creates durable operating leverage and distribution advantages. Large custody share and RIA leadership lower unit costs, deepen client stickiness, and support cross‑sell of advisory, lending, and banking products over multiple rate cycles.
Negative Factors
Rate Sensitivity of Net Interest Income
A material portion of economic value derives from net interest revenue, which varies with rates, cash sweep behavior, and funding mix. Despite hedges and balance‑sheet actions, persistent rate shifts or client cash reallocation can materially change NII and margins, creating ongoing earnings exposure.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & Market Leadership
Market-leading scale — ~46M accounts and ~ $12T assets — creates durable operating leverage and distribution advantages. Large custody share and RIA leadership lower unit costs, deepen client stickiness, and support cross‑sell of advisory, lending, and banking products over multiple rate cycles.
Read all positive factors
Charles Schwab (SCHW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$166.11B
Dividend Yield1.07%
Average Volume (3M)8.68M
Price to Earnings (P/E)20.0
Beta (1Y)0.93
Revenue Growth5.90%
EPS Growth66.60%
CountryUS
Employees32,100
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.39
Shares Outstanding1,752,210,400
10 Day Avg. Volume8,857,900
30 Day Avg. Volume8,679,268
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)3.58
Price to Sales (P/S)6.40
P/FCF Ratio20.20
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue7.27
Enterprise Value/Gross Profit8.58
Enterprise Value/Ebitda15.08
Forecast
1Y Price Target
$118.75Price Target Upside25.26% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)5.98
Revenue Forecast (FY)$26.67B
Charles Schwab Business Overview & Revenue Model
Company Description
The Charles Schwab Corporation, together with its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates in two segments, Investor Services and Advi...
How the Company Makes Money
Schwab generates revenue mainly from (1) net interest revenue, (2) asset-based fees, (3) trading revenue, and (4) other service fees.
1) Net interest revenue (interest earnings minus interest paid): Schwab’s largest economic driver is typically t...
Charles Schwab Earnings Call Summary
Earnings Call Date:Jan 21, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and financial narrative: record revenue, EPS and margins, significant NNA and account growth, leading trading volume, strong lending and margin expansion, disciplined expense management and active capital return. Management provided a constructive 2026 scenario with mid-single-digit organic asset growth, margin expansion and continued investment in AI, branches, crypto and alternatives. Risks include higher volume-related costs, sensitivity to trading volumes and macro/rate outcomes, early-stage execution requirements for the alternatives offering, and some near-term buyback uncertainty. Overall, the positives (scale, record results, diversified growth levers and capital strength) materially outweigh the identified challenges.Positive Updates
Record Financial Results
Total net revenues reached a record $23.9 billion, up 22% year-over-year. Adjusted earnings per share were a record $4.87, up 50% versus 2024. Adjusted pretax profit margin expanded nearly 800 basis points to ~50% for the year, and Q4 adjusted EPS grew 38% year-over-year to $1.39.
Negative Updates
Volume-Related Expense Pressures in Q4
Higher-than-anticipated client trading activity late in the year drove increased volume-related costs, including performance-based compensation, contributing to a Q4 adjusted expense increase of 6% YoY (and full-year adjusted expense growth of 6%).
Read all updates
Q4-2025 Updates
Positive
Negative
Record Financial Results
Total net revenues reached a record $23.9 billion, up 22% year-over-year. Adjusted earnings per share were a record $4.87, up 50% versus 2024. Adjusted pretax profit margin expanded nearly 800 basis points to ~50% for the year, and Q4 adjusted EPS grew 38% year-over-year to $1.39.
Read all positive updates
Company Guidance
Schwab's 2026 guidance assumes the Fed follows the forward curve (225 bps of cuts to ~3.25% by year‑end) and 6.5% equity returns, and models full‑year organic asset growth of ~5% from a starting base of ~46 million accounts and nearly $12 trillion of client assets; trading volumes are assumed to normalize to ~7.4 million daily average trades, supporting total revenue growth of 9.5%–10.5%, full‑year NIM of 2.85%–2.95% (4Q NIM >2.9%), expense growth of 5.5%–6.5%, adjusted pretax margins in the low‑50s and implied adjusted EPS of ~$5.70–$5.80 (upper‑teens YoY growth). Management noted balance‑sheet actions and hedges that reduced interest‑rate sensitivity by ~1/3 and added modest income hedges on the margin book (such that even a drop toward 2% rates would likely still allow ≥~10% EPS growth), and reiterated capital targets and return priorities (adjusted Tier‑1 leverage objective 6.75%–7% — 7.1% at year‑end 2025 — opportunistic buybacks including $2.7B in Q4 and $11.8B returned in 2025, and a 20%–30% GAAP dividend payout orientation).Charles Schwab Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 27.68B | 26.00B | 25.52B | 22.31B | 19.00B |
| Gross Profit | 22.22B | 19.61B | 18.84B | 20.76B | 18.52B |
| EBITDA | 15.04B | 9.13B | 7.72B | 10.64B | 8.88B |
| Net Income | 8.85B | 5.94B | 5.07B | 7.18B | 5.86B |
Balance Sheet | |||||
| Total Assets | 491.00B | 479.84B | 493.18B | 551.77B | 667.27B |
| Cash, Cash Equivalents and Short-Term Investments | 632.00M | 124.70B | 149.25B | 188.03B | 453.03B |
| Total Debt | 31.86B | 45.13B | 59.08B | 37.88B | 23.77B |
| Total Liabilities | 441.57B | 431.47B | 452.22B | 515.16B | 611.01B |
| Stockholders Equity | 49.40B | 48.38B | 40.96B | 36.61B | 56.26B |
Cash Flow | |||||
| Free Cash Flow | 8.76B | 2.05B | 18.89B | 1.09B | 1.20B |
| Operating Cash Flow | 9.31B | 2.67B | 19.59B | 2.06B | 2.12B |
| Investing Cash Flow | 24.54B | 35.43B | 57.41B | 32.05B | -75.66B |
| Financing Cash Flow | -29.70B | -47.06B | -61.24B | -68.72B | 96.32B |
Charles Schwab Technical Analysis
Neutral
94.80
Price Trends
95.94
Negative
96.79
Negative
95.32
Negative
Market Momentum
-0.08
Negative
50.30
Neutral
83.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCHW, the sentiment is Neutral. The current price of 94.8 is above the 20-day moving average (MA) of 94.18, below the 50-day MA of 95.94, and below the 200-day MA of 95.32, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 50.30 is Neutral, neither overbought nor oversold. The STOCH value of 83.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SCHW.
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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $31.73B | 29.11 | 19.88% | 0.46% | 11.88% | 28.96% | |
74 Outperform | $166.11B | 20.00 | 17.91% | 1.07% | 5.90% | 66.60% | |
70 Outperform | $28.81B | 14.06 | 16.94% | 1.26% | 6.45% | 5.85% | |
70 Outperform | $267.80B | 16.00 | 13.81% | 1.55% | 2.31% | 44.49% | |
69 Neutral | $282.07B | 16.54 | 15.45% | 2.14% | 7.22% | 48.18% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
60 Neutral | $25.03B | 32.56 | 18.57% | 0.32% | 35.19% | -18.62% |
* Financial Sector Average
SCHW
Charles Schwab
94.80
18.81
24.76%
IBKR
Interactive Brokers
71.21
28.18
65.50%
LPLA
LPL Financial
312.53
2.84
0.92%
MS
Morgan Stanley
177.64
71.38
67.18%
RJF
Raymond James Financial
146.19
12.94
9.71%
GS
Goldman Sachs Group
907.80
414.05
83.86%
Charles Schwab Corporate Events
Business Operations and StrategyM&A Transactions
Charles Schwab Completes Forge Global Acquisition to Expand Alternatives
Positive
Mar 2, 2026
On March 2, 2026, Charles Schwab completed its acquisition of Forge Global Holdings, Inc., a platform that provides eligible investors with access to pre-IPO company shares via direct private share purchases and specialized funds. The all-cash dea...
Business Operations and StrategyExecutive/Board Changes
Charles Schwab Announces Key Executive and Organizational Changes
Positive
Jan 29, 2026
On January 29, 2026, Charles Schwab announced a series of executive transitions and organizational changes, highlighted by the immediate appointment of Dennis Howard as Managing Director, Chief Technology, Operations and Data Officer, expanding hi...
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.