The Charles Schwab CorporationNYSE
Fri, Oct. 21, 6:40 AM
Tue, Oct. 18, 10:52 AM
- Schwab (NYSE:SCHW) slipped yesterday following a headline beat on earnings as investors may have been disappointed by a one basis point decline in net interest margin, says UBS analyst Alex Kramm.
- There's also the rapid growth of the company's banking operation which could mean an "eventual increase in regulatory oversight."
- Nevertheless, says Kramm, the results reiterate the strength of the core business, while external factors (rates) drive sentiment on the stock. The current multiple, he says, "does not give full credit" to the chances of higher rates.
- He keeps his Buy rating and $37 price target (15% upside).
- Shares are up 1.2% today.
Mon, Oct. 17, 9:58 AM
- Q3 net income of $503M or $0.35 per share vs. $376M and $0.28 one year ago. Net litigation proceeds added a penny per share to this year's result.
- Pretax profit margin at a record 41.5%, up 500 basis points. ROE of 14% up 100 basis points.
- Net interest revenue of $845M up 33% Y/Y, with a 22% increase in average interest-earning assets, and the rest from higher short-term rates.
- Trading revenue of $190M fell 17%, with this year's Q3 less volatile than 2015's.
- SCHW -2.15%
- Previously: Charles Schwab beats by $0.02, beats on revenue (Oct. 17)
Mon, Oct. 17, 8:56 AM
- Charles Schwab (NYSE:SCHW): Q3 EPS of $0.35 beats by $0.02.
- Revenue of $1.91B (+19.4% Y/Y) beats by $20M.
- Shares +0.41% PM.
Sun, Oct. 16, 5:30 PM
Thu, Oct. 13, 7:36 AM
- Catching an upgrade to Buy from Neutral is TD Ameritrade (NASDAQ:AMTD), with analyst Michael Carrier seeing upside from higher interest rates, and other factors like M&A (rumors of Scottrade interest) and competitive pricing. The $43 price target is up from $33, and suggests another 20% upside from current levels.
- Also upgraded is Schwab (NYSE:SCHW).
- Downgraded to Neutral from Buy is E*Trade (NASDAQ:ETFC).
Fri, Oct. 7, 12:44 PM
- Responding to BlackRock's (BLK -0.4%) move to cut fees on 15 of its popular ETFs, Schwab (SCHW -0.7%) announces trimmed costs on five of its widely-used funds. The cuts affect abut $18B in AUM, or 35% of the total in Schwab ETFs.
- The fee for the Schwab U.S. Aggregate Bond ETF is falling to 0.04% from 0.05% BlackRock this week cut the fee on its AGG to 0.05% from 0.08%.
- The Schwab U.S. Small-Cap ETF (NYSEARCA:SCHA) is cut one basis point to 0.06%. BlackRock cut the fee on its iShares S&P SmallCap 600 Index ETF (NYSEARCA:IJR) to 0.07% from 0.12%.
- The Schwab U.S. Mid-Cap ETF (NYSEARCA:SCHM) is cut one bp to 0.06%. The Schwab International Equity ETF (NYSEARCA:SCHF) is cut one bp to 0.07%. The Schwab Emerging Markets ETF (NYSEARCA:SCHE) is cut one bp to 0.13%.
- Lee Kranefuss - one of the founders of iShares - says not to be surprised to see someone make headlines with a zero fee fund, but don't look for that for whole fund families.
Fri, Oct. 7, 10:47 AM
- Hardly even noticeable in the ETF market five years ago, Schwab (SCHW +0.4%) - after pulling in $10B to its funds this year - is ranked 5th in AUM with $54B in 21 ETFs.
- Interestingly, the company has grown so strongly while focusing on the plain-vanilla funds where there was already plenty of competition from sector giants BlackRock, Vanguard, and State Street. Schwab's been able to do this by undercutting on price, and its status as a financial supermarket with millions of captive clients. Then there's last year's launch of a robo-adviser which mainly builds client portfolios through Schwab ETFs.
- Still, there's little chance of Schwab overtaking the big three anytime soon - BlackRock has $900B in its iShares unit, and even #4 Invesco has double the amount in ETFs that Schwab has. "The captive-audience model has its limits," says FactSet's Dave Nadig, finding it hard to imagine Vanguard customers buying Schwab ETFs.
- Also, the price war is picking up, with Goldman Sachs last year launching a line of cheaply-priced smart beta ETFs, and BlackRock this week slashing expenses on 15 products (in some cases matching Schwab's pricing).
- Source: Bloomberg's Charles Stein
Tue, Oct. 4, 2:19 PM
- A Bloomberg report says the ECB is likely to gradually wind down bond purchases ahead of the scheduled March 2017 end of its QE program. The central bank is currently buying €80B per month of government and corporate paper, and may begin to slow that amount by €10B per month, according to the story.
- Yields are higher in Europe and the U.S., with the 10-year U.S. Treasury up five basis points to 1.675% and the German 10-year Bund yield is up four bps to -0.048%. TLT -1.1%, TBT +2.2%
- Though the Dow and S&P 500 are each lower by 0.5%, the yield-starved XLF is up 0.6%, with Bank of America (BAC +2.1%), Citigroup (C +1.9%), and JPMorgan (JPM +0.4%) leading the way. Shrouded in scandal, Wells Fargo (WFC -0.2%) continues to underperform.
- Other names: Regions Financial (RF +1.5%), KeyCorp (KEY +2.1%), BB&T (BBT +1.4%), Schwab (SCHW +1.5%), MetLife (MET +1.1%), Prudential (PRU +1.3%).
- ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, FNCL, SEF, FXO, KBWB, QABA, KBWR, RYF, FINU, KRU, RWW, XLFS, FINZ, KRS, JHMF, WDRW, DPST, FAZZ, FNCF
Fri, Sep. 30, 8:33 AM
- TD Ameritrade (NASDAQ:AMTD) had a big move yesterday after Bloomberg reported Scottrade has put itself on the block, with Ameritrade as a possible suitor.
- Don't forget possible interest from Schwab (NYSE:SCHW) and E*Trade (NASDAQ:ETFC), says Wells Fargo, which believes a deal would be accretive by double-digit levels.
- That said, Ameritrade could be the most logical buyer, given that E*Trade just closed on a purchase (OptionsHouse) and Schwab has sought to place less emphasis on trading.
- Wells keeps its Outperform rating on E*Trade and Market Perform ratings on Schwab and Ameritrade.
Mon, Sep. 26, 1:03 PM
- The industry is facing three disruptive threats, says analyst Michael Cyprys: Competition for customer assets/activity, a growing regulatory burden, and technologies that can transform business models.
- Advice is the key, he says, and moving into this segment opens up a $22T wealth pool for the brokers.
- His favorite is Charles Schwab (NYSE:SCHW), as it has the most diversified revenue streams and most EPS upside from current rates. He starts the stock at Overweight with a $37 price target.
- His least favorite is LPL Financial (NASDAQ:LPLA), thanks to a lack of clarity on regulatory issues and the business model.
- E*Trade (NASDAQ:ETFC) and Ameritrade (NASDAQ:AMTD) are Equal Weight.
Wed, Sep. 21, 12:10 PM
- Smart Beta ETFs may be key for the next leg of industry growth, says asset manager analyst William Katz. Further, he expects to see a narrowing of winners, with low probability for newer entrants to pick up sizable market share gains. The key areas of opportunity, he says, are fixed-income, non-U.S., and institutional channels, with growth there coming from further declines in active management and single-stock trading.
- Back to being an early entrant: Katz says there's +0.81 correlation between the age of an ETF and AUM, and 71% of first-mover funds have the highest AUM for their category. For these reasons, current leaders like iShares (NYSE:BLK), Vanguard, State Street (NYSE:STT), PowerShares (NYSE:IVZ), and Schwab (NYSE:SCHW) should remain among the largest ETF sponsors.
Wed, Sep. 21, 10:14 AM
- Credit Suisse had been restricted from coverage due its role as an advisor to E*Trade (NASDAQ:ETFC) on a recent acquisition (OptionsHouse).
- Picking coverage back up with an Outperform rating and hiked price target (to $33 from $30), analyst Christian Bolu says the company "is at another critical inflection point," after the lack of core business growth led to the firing of the CEO last week.
- New management has promised 2-3% incremental growth, or it will consider a sale of the company, notes Bolu.
- Mulling a takeout by TD Ameritrade (NASDAQ:AMTD) or Schwab (NYSE:SCHW), Bolu says it would likely be at little to no premium to the current stock price as there's not much strategic rationale, and there are likely sizable revenue dis-synergies.
- Bolu nevertheless lifts his 2018 EPS estimate to $1.90 from $1.80 thanks to the OptionsHouse acquisition. The $33 price target is based on 15x long-term earnings power of $2 per share, plus about $2.60 per share of the deferred tax asset.
Thu, Sep. 15, 11:51 AM
Wed, Sep. 14, 11:03 AM
- It's no surprise that yield-starved financials are expected to be a big beneficiary of higher base rates, but the team at Goldman has six that stand to gain the most.
- Bank of America (NYSE:BAC), BNY Mellon (NYSE:BK), Citizens Financial (NYSE:CFG), Regions Financial (NYSE:RF), Schwab (NYSE:SCHW), and Zions Bancorp (NASDAQ:ZION) make the cut.
- Goldman sees an average 46% upside to normalized earnings for the group if rates go back to 3% (a long way off for even the most hawkish).
- Used to low and slow as far as rate hikes go, investors may be overlooking the potential for even one Fed move this year to be a positive catalyst. The team suggests taking a look at 6-month and 12-month calls on their recommendation list.
Thu, Jul. 28, 3:02 PM
- Schwab (NYSE:SCHW) didn't get into the ETF business until 2009, but with $7.69B of inflows YTD, the operation manages $50.4B in ETF assets, making it the fifth-largest U.S. ETF sponsor.
- A big reason is fees, and Schwab's funds have among the lowest expenses in the industry - in some cases lower than competing funds at Vanguard (whether there's a profit in that is a different story).
- The Schwab U.S. Large Cap ETF (NYSEARCA:SCHX) and Schwab U.S. Broad Market ETF (NYSEARCA:SCHB) are the company's two largest ETFs, and each have a barely visible 0.03% expense ratio. They've brought in $681.5M and $569.6M of inflows, respectively, this year, according to S&P Capital IQ, which rates both ETFs Overweight.
- In fixed-income, the $3.18B Schwab Strategic Trust (NYSEARCA:SCHZ) is 2nd in inflows this year among Schwab funds, with $994.3M. It's 0.05% expense ratio is lower than comparable ETFs from iShares and Vanguard. S&P Capital IQ rates it Overweight as well.