Charles Schwab Corp. (SCHW) Upgraded to Outperform ar Raymond James
Raymond James analyst Patrick O'Shaughnessy upgraded Charles Schwab Corp. (NYSE: SCHW) to a Outperform rating (from Market Perform), PT $63.00
The analyst comments "We are upgrading Charles Schwab to Outperform from Market Perform and establishing a $63 target price. We believe recent data indicate that client cash sorting at Schwab is tapering, which should support balance sheet and net interest margin stabilization in 2H23. We do think consensus estimates for 2023/24 remain too high but believe the buy-side is more aligned with our below-consensus views. While the specter of a stricter regulatory regime may be an overhang for some time, we think the incremental risk to Schwab’s earnings power is likely to be somewhat limited. On the valuation front, elevated cash sorting is a stark reminder of the interest rate risk inherent within Schwab’s business model. However, the company has very little credit risk and an attractive core growth story that was unaffected by recent macro events, which we believe can lead to P/E multiple re-rating once EPS estimates stabilize."