SCHW Stock Price: $65 Target By Morgan Stanley

By Amit Chowdhry ● November 19, 2020
  • The stock price of Charles Schwab Corporation (NYSE: SCHW) has received a price target increase from $51 to $65 by Morgan Stanley. These are the details.

The stock price of Charles Schwab Corporation (NYSE: SCHW) has received a price target increase from $51 to $65 by Morgan Stanley. And Morgan Stanley analyst Michael Cyprys also assigned the stock price an “Overweight” rating.

Charles Schwab recently reported October core new assets of $25.6 billion. And as of October 31, Charles Schwab reported its total assets under management was $5.88 trillion. Of the $5.88 trillion, $1.6 trillion was added through the $22 billion acquisition of TD Ameritrade. And now Charles Schwab is closing in on Vanguard ($6.6 trillion in assets), BlackRock ($7.3 trillion in assets), and Fidelity ($9 trillion in assets).

The average interest-earning assets on Schwab’s balance sheet was $442.1 billion — which is up 66% from October 2019. And client cash as a percentage of total client assets increased to 13.4% in October from 11.3% a year ago.

Charles Schwab also reported its third-quarter results about a month ago. The revenues were $2.4 billion with earnings per share being at $0.48, which is about 10% less than a year ago.

And net income attributable to shareholders totaled $698 million (51 cents per share). This beat analyst estimates of 46 cents per share. 

Short- and long-term interest rates decreased at an 18% year-over-year decline in the investment portfolio and relevant revenues decline about $20 million due to the shift to commission-free trading. During the pandemic, historically low interest rates also had a negative impact on Schwab’s revenue into the third quarter.

Citi analyst William Katz also upgraded Charles Schwab to Buy from Neutral with a price target increase from $44 to $54. And Katz upgraded the shares to “Overweight” from “Selective.”