Key insights
- Raymond James raised its price target for Charles Schwab to $128, citing higher interest rates benefiting reinvestments and margin loan yields. Retail investor engagement remains strong. While net new asset growth slowed in January and February, healthy account growth is encouraging. The firm values Schwab at 13x 2027 EPS, viewing the risk/reward as favorable. Schwab reported $32.5B in core net new assets for February, including a $17.5B outflow from a planned deconversion.
Investing.com - Raymond James raised its price target on Charles Schwab Corp. (NYSE:SCHW) to $128 from $121 while maintaining an Outperform rating on the stock. The stock currently trades at $92.85 with a P/E ratio of 19.93, and InvestingPro analysis suggests the company is undervalued relative to its Fair Value.
The firm cited higher interest rates as a positive factor for reinvesting maturing securities and margin loan yields. Retail investors remain very engaged with the markets, according to the firm.
Raymond James expressed some concern about a slowdown in net new asset growth in January and February. The firm noted it was encouraged by healthy account growth.
The analyst commentary stated, "We maintain our Outperform rating on Charles Schwab and increase our target price to $128 ahead of 1Q26 earnings. Higher interest rates are a positive for reinvesting maturing securities and margin loan yields, while retail investors remain very engaged with the markets. We are a bit concerned about a slowdown in net new asset growth in January and February, but are encouraged by healthy account growth. With a relatively undemanding valuation multiple of just 13x our 2027 EPS estimate, we believe the risk/reward is quite favorable."
The firm values the stock at 13 times its 2027 earnings per share estimate. An InvestingPro Tip notes that Schwab is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of just 0.35. Investors can access additional exclusive insights in Schwab’s comprehensive Pro Research Report, available for 1,400+ US stocks.
In other recent news, Charles Schwab Corporation reported $32.5 billion in core net new assets for February, which includes a $17.5 billion outflow due to a planned mutual fund clearing client deconversion. Excluding this one-time event, the company’s core net new assets amounted to $50.0 billion for the month. Additionally, Charles Schwab achieved a record trading month with 9.9 million daily average revenue trades in February, and core net new assets growth rebounded to approximately 4.7% on a seasonally adjusted annualized basis. Truist Securities reiterated its Buy rating on Charles Schwab, maintaining a $122 price target, though it later adjusted the target to $120 while still holding a positive outlook. The firm’s revised model accounts for a more conservative balance sheet with projected average earning assets reaching $478 billion by the fourth quarter of 2027. In a strategic move, Charles Schwab introduced the Schwab Teen Investor account, allowing individuals aged 13 to 17 to engage in trading activities under parental supervision. This recent development is part of the company’s broader efforts to expand its customer base. Bank of America analysts noted that the ongoing Iran conflict is causing market volatility, which may impact traditional asset managers in the near term.
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