Goldman Sachs Downgrades Charles Schwab Corp. (SCHW) to Neutral, Don't Fight the Fed

Goldman Sachs downgraded Charles Schwab Corp. (NYSE: SCHW) from Buy to Neutral with a price target of $14.00 (from $15.00), telling investors "don't fight the Fed."

"While we continue to view SCHW as the most diversified franchise within the online brokerage space, the Fed’s recent monetary easing actions and their subsequent impact on Agency RMBS yields will place incremental pressure on the firm’s net interest margin, driving potential downside to earnings over the next 6-12 months," the analyst comments.

In addition, shares are trading at 19X 2013 P/E, in line with its three-year average, and they don't see any potential for multiple expansion.

Goldman lowered 2012/2013/2014 estimates to $0.68/$0.75/$0.95 from $0.70/$0.80/$1.00 largely on lower net interest income expectations.

For an analyst ratings summary and ratings history on Charles Schwab Corp. click here. For more ratings news on Charles Schwab Corp. click here.

Shares of Charles Schwab Corp. closed at $13.94 yesterday.

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