Charles Schwab Corp. (SCHW) PT Lowered to $65 at Citi on More Expensive Financing Dynamics

Citi analyst Chris Allen lowered the price target on Charles Schwab Corp. (NYSE: SCHW) to $65.00 (from $75.00) while maintaining a Buy rating.

"SCHW has been under consistent pressure as there has been healthy debate on the continued impact of client cash sorting and where SCHW’s
balance sheet financing shakes out. In this note, we adjust our estimates downward to reflect more conservative financing assumptions (higher ST
financing, lower deposit levels) and lay out bear/bull cases on cash sorting. In our view, it is too early to tell where deposits/IEA levels settle at as we see a range of factors (rate/market levels, SCHW’s ability to generate NNA, position as a safe haven) which could impact estimates. Long-term, we like the stock given the scale benefits of the platform and ability to attract NNA and drive LT growth. We acknowledge that the stock could be range-bound until we see more clarity on client cash dynamics, but still believe current levels will prove to be an attractive entry point for those with longer-term time horizons."

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