Charles Schwab Corporation’s (NYSE:SCHW) stock has already risen more than 10% in the past year. But a Wells Fargo Analyst says that investors aren’t completely missing out on this giant financial services company.
Michael Brown believes the company will reach $93 within the next few months, after beating Street expectations in its latest financial quarter.
Our call for SCHW was that the debate between bulls and bears would limit shares to a range. After a strong print and call the bear case has become weaker and we are expecting the bull case will prevail,” said he in today’s note to clients.
Charles Schwab’s stock pays out a current dividend yield of 1.24 percent, making it incredibly attractive for investors who are looking to earn income.
Charles Schwab shares to benefit from stock buybacks
Charles Schwab attributed its recent quarter’s strength to a record of net inflows as well as the TD Ameritrade merger.
Michael Brown, Wells Fargo’s Michael Brown said that the New York-listed firm has also indicated plans to resume stock buybacks in this year. This will help boost its share prices further by 2025.
We expect to see ongoing net interest and operating margin growth, as well as continued capital and balance sheet improvements, with the return of buybacks and improved organic growth in 2025.
Brown’s price target of $93 for Charles Schwab is just a little below its all-time highest stock value in January 2022, which was $95
Schwab enters the spot cryptocurrency trading
Wells Fargo’s analyst believes Charles Schwab will continue to grow in terms of net assets, and is therefore positive about the shares.
It expects that the rate of growth will eventually be between 5,0% and 7,0%.
Michael Brown, in his report published on Wednesday, argued that the asset side would benefit in 2H25 from the loan demand as well as securities repricing.
Schwab currently awaits regulatory approval to extend its spot cryptocurrency trading offering.
This move could also result in a significant increase in the stock price of its company in 2025, as it is expected that Trump 2.0 will continue to be a proponent of cryptocurrencies.
The US president has promised to turn America into the Crypto Capital of the World.
Charles Schwab is a good stock to buy?
Charles Schwab’s stock isn’t the only one that Wells Fargo analysts see as having further potential.
David Smith, Truist’s analyst, also kept his buy rating for the shares after the chief executive of the firm said that “clients are continuing to engage with us more, they have been using our lending, trading and wealth solutions more.”
Charles Schwab announced $5.53 billion of revenue and 94 cents per share for its fourth quarter earnings last night.
Comparatively, analysts were expecting $5.2 billion in revenue and $1.91 per share.
Investors should be aware that SCHW’s shares, at around 30 times their earnings compared to the historical average, aren’t particularly cheap.
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