Jefferies updated its outlook on Charles Schwab Co. (NYSE:NYSE:) stock on Wednesday, raising its price target to $84 from $73 while maintaining a “buy” rating on the stock. The adjustment follows Charles Schwab’s third-quarter 2024 results, which will result in slight changes to its fourth-quarter 2024 and full-year 2025 earnings per share (EPS) estimates. The new EPS estimate for the fourth quarter is set at $0.87. The price rose from $0.82 to $3.80 in 2025, down slightly from $3.85.
The company noted a significant increase in deposits during September, with inflows of $17 billion. This jump was highlighted as a positive sign for the company, especially since it did not include any non-reproducible items, suggesting the potential for sustained growth. The analyst noted that while such strong deposit growth may not be sustainable in the long term, it still reflects strong business performance.
Charles Schwab’s organic growth is showing signs of accelerating, increasing by 3.9% annually in the third quarter of 2024. This pace is inching closer to the company’s long-term goal of 5-7% growth. The company’s ability to attract and retain customer assets appears to be improving, which is a positive indicator for the company’s future business prospects.
The latest information from Jefferies comes after an in-depth analysis of Charles Schwab’s recent financial performance and growth trajectory. The increased price target and continued “buy” rating suggest confidence in the company’s strategy and ability to capitalize on market opportunities.
Investors and market watchers often look to these updates from financial analysts to gauge the performance and potential of public companies. With a new price target and Jefferies’ positive outlook, Charles Schwab stock may gain even more attention from the investment community.
In other recent news, Charles Schwab Corporation reported a strong third quarter of 2024, with revenue up 5% year over year to $4.8 billion and adjusted earnings per share of $0.77 was shown. The company was able to reduce additional capital by $9 billion, improving its adjusted Tier 1 leverage ratio to 6.7%. Net new assets more than doubled compared to the same period last year, demonstrating strong customer engagement.
Financial institutions Goldman Sachs, Citi, and Barclays remain neutral on Charles Schwab, with Goldman Sachs keeping its price target at $74 and Citi setting it at $72 to $75. Barclays raised its target from $64 to $74. These adjustments are based on the company’s recent financial performance and strategic progress.
Charles Schwab expects revenue growth of 2% to 3% for all of 2024 and plans to introduce new retail alternatives in the fourth quarter. However, taking into account potential macroeconomic uncertainties, the company has adjusted its net interest margin forecast through the end of 2025.
Finally, a leadership change is underway, with CEO Walt Bettinger retiring and Rick Wurster expected to assume the role in January 2024. These are the recent developments at Charles Schwab Corporation.
Investment Pro Insights
Charles Schwab’s recent performance is consistent with some key insights from InvestingPro. The company’s stock has shown great momentum, returning 7.89% last week and 12.98% over the past month, according to InvestingPro data. This upward trend supports Jefferies’ bullish stance and increased price target.
InvestingPro Tips highlights that Charles Schwab has maintained its dividend for 36 consecutive years, demonstrating financial stability and a commitment to shareholder returns. This consistency is especially noteworthy given the recent deposit increases and accelerated organic growth mentioned in the article.
Additionally, InvestingPro’s data indicates a P/E ratio of 29.95, which, when considered in conjunction with the company’s growth prospects and deposit inflows, may indicate further value creation potential. The market capitalization of $131.64 billion highlights Schwab’s important position in the financial services industry.
For investors looking for a more comprehensive analysis, InvestingPro offers 8 additional tips on Charles Schwab, providing deeper insight into the company’s financial health and market position.
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