Schwab Corp Needs To Prove Itself After Big Run
Dec. 18, 2015, 3:21 PM
- Still bullish on the long-term outlook for Schwab (SCHW -3.4%), the team at Piper Jaffray downgraded to Neutral thanks to its expectation for multiple compression over the next year.
- Higher interest rates should mean re-emerged earnings power, they say, but Schwab is trading at 25x earnings vs. what the team says should probably be more like 18-19x. While not expecting an immediate reversion, the team notes Schwab is more expensive than its peers.
- The price target of $38 (up from $36, and against the current stock price of $32.09) is based on 21.5x forward four-quarter earnings.
- Previously: Piper Jaffray pulls Schwab buy recommendation (Dec. 18)
Dec. 18, 2015, 9:51 AM
- Higher short-term interest rates are supposed to be a positive catalyst for Schwab (NYSE:SCHW), which has lost a fortune rebating money market fees to clients so they don't net a negative return on the accounts.
- Markets do tend to discount these things though, and Piper - on the week the Fed finally hiked - downgrades to Neutral from Overweight, with price target cut to $36 from $38.
- Shares -1.4% to $32.75.
Dec. 16, 2015, 3:04 PM
- Wells Fargo's quick post-FOMC boost in its prime rate while leaving the deposit rate unchanged makes clear why bank bulls have been banking on a higher Fed Funds rate - higher net interest margins.
- U.S. Bancorp (USB +1.3%) has quickly followed suit.
- Owing to the glut of deposits, it could be several quarters before lenders begin raising rates for savers, reminds CNBC's Kayla Tausche.
- The XLF is higher by 1.5%.
- Individual names: Bank of America (BAC +1.6%), JPMorgan (JPM +2%), PNC Financial (PNC +2.1%), First Niagara (FNFG +2.1%), Regions Financial (RF +1.2%), Schwab (SCHW +1.5%), MetLife (MET +2.1%), Prudential (PRU +1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, FINZ, KRS, XLFS
- Previously: Fed officially puts an end to ZIRP (Dec. 16)
- Previously: Yellen: Factors holding down inflation to fade (Dec. 16)
Dec. 14, 2015, 1:14 PM
- November DARTs came in above October levels, say the UBS team, which also estimates total client assets are north of Q4 forecasts, even with market losses and a slowdown in core net new asset growth last month.
- Parsing some other stats: Mutual funds saw significant outflows of $3.6B, but these were more than offset by inflows into ETFs. Active accounts inbound calls per day and web logins per day of 1.56K were up slightly from October's 1.53K.
- SCHW +1.1% on the session.
Nov. 13, 2015, 10:17 AM
- October net new assets of $10.5B.
- Total client assets of $2.54T up 5% M/M, up 4% Y/Y.
- New brokerage accounts of 88K, up 10% M/M, up 16% Y/Y.
- SCHW -1.6%
Nov. 11, 2015, 8:39 AM
- Following BlackRock's (NYSE:BLK) move to cut the price of its iShares Core S&P Total U.S. Stock Market ETF (NYSEARCA:ITOT) to just three basis points - below that of Vanguard's Total Stock Market ETF (NYSEARCA:VTI) at five bps and Schwab's (NYSE:SCHW) U.S. Large-Cap ETF (NYSEARCA:SCHX) at four bps - Schwab says it will trim SCHX's expense ratio by one basis point to match the iShares cost (timing uncertain).
- Schwab spokesman Greg Gable says the company will also consider a cut in the U.S. Broad Market ETF (NYSEARCA:SCHB), which is currently at four basis points.
- Previously: ETF price wars: BlackRock slashes prices on Core iShares products (Nov. 10)
Nov. 9, 2015, 10:57 AM
- U.S.-listed ETFs and ETPs have brought in a record $174.8B in net new assets this year as of the end of October (beating the previous record in 2013 by 12.4%), according to ETFGI. October's net inflows of $28.4B marked the ninth consecutive month of gains.
- For ETFs and ETPs listed globally, net inflows through the end of October of $287.3B are up 22.3% over the same period in 2014.
- Year-to-date, BlackRock's (NYSE:BLK) iShares had the most net inflows with $72.3B, followed by Vanguard at $60B, and WisdomTree (NASDAQ:WETF) at $19.4B. Schwab (NYSE:SCHW) ETFs brought in $11B.
- In October, iShares also led the way, with Vanguard second. In third place were SPDR (NYSE:STT) ETFs, and in fourth Invesco's (NYSE:IVZ) PowerShares.
Nov. 6, 2015, 10:04 AM
- The major averages are lower following the blowout jobs number, but the financial sector (XLF +1%) is charging ahead, enthused at what appears to finally be the near-certain prospect of higher interest rates.
- Short-term interest rate futures are pricing in about a 75% chance of a rate hike next month, and the 10-year Treasury yield is up nine basis points to 2.32%. The two-year yield has soared all the way to 0.90% - its highest level in more than five years.
- The green in this yield-starved sector is everywhere: Bank of America (BAC +3.5%), Citigroup (C +3.4%), U.S. Bancorp (USB +2.8%), Regions Financial (RF +3.7%), PNC Financial (PNC +2.4%), Capital One (COF +1.4%), Bank of New York Mellon (BK +1.9%), E*Trade (ETFC +3.5%), Schwab (SCHW +5.1%), Interactive Brokers (IBKR +3.4%), MetLife (MET +3.2%), Prudential (PRU +3.6%).
- Previously: Big beat on jobs number (Nov. 6)
- Previously: December rate hike back on after big jobs number (Nov. 6)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, KIE, IAT, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, KBWR, RWW, RYF, KBWP, KBWI, FINZ, KRS, XLFS
Oct. 23, 2015, 12:36 AM
- Charles Schwab (NYSE:SCHW) declares $0.06/share quarterly dividend, in line with previous.
- Forward yield 0.81%
- Payable Nov. 20; for shareholders of record Nov. 6; ex-div Nov. 4.
Oct. 15, 2015, 8:58 AM
- Q3 net income of $376M or $0.28 per share vs. $321M and $0.24 one year ago. Adjusting for one-time items brings EPS to $0.27 vs. $0.25 one year ago.
- New retail brokerage accounts of 158K up 12% Y/Y. Total accounts of 6.8M up 1%. Core net new assets of $30.8B during quarter. Total client assets of $2.42T up 1%.
- Asset management and administration fees of $663M vs. $649M a year ago. Net interest revenue of $635M vs. $573M. Trading revenue of $228M vs. $209M.
- Total expense of $1.014B vs. $1.033B a year ago.
- Money market fee waivers of $166M vs. $190M a year ago.
- Previously: Charles Schwab EPS in-line, beats on revenue (Oct. 15)
- SCHW flat premarket
Oct. 15, 2015, 8:50 AM
- Charles Schwab (NYSE:SCHW): Q3 EPS of $0.27 in-line.
- Revenue of $1.6B (+3.2% Y/Y) beats by $10M.
Oct. 2, 2015, 9:08 AM
- September's weak print has combined with a sizable downward revision to August's already so-so numbers to push rate hike expectations into late Q1 or Q2 of next year.
- S&P 500 futures are down 1.2%, but the Financial SPDR (NYSEARCA:XLF) is off 2% as the yield-starved names which make up the ETFs holdings look like they're going to have to wait at least a little while longer for higher rates. The SPDR Regional Bank ETF (NYSEARCA:KRE) is lower by 2.75%.
- Premarket action in individual names: Citigroup (NYSE:C) -2.25%, BofA (NYSE:BAC) -2.8%, JPMorgan (NYSE:JPM) -3.1%, Fifth Third (NASDAQ:FITB) -2.6% (also hit with a Goldman downgrade to Neutral), Regions Financial (NYSE:RF) -1.8%, Schwab (NYSE:SCHW) -2%, E*Trade (NASDAQ:ETFC) -2.3%, MetLife (NYSE:MET) -2%.
- Previously: Futures turn sharply lower after weak jobs report (Oct. 2)
- Previously: Treasurys to the moon after lame jobs report (Oct. 2)
- Previously: Big miss for jobs numbers (Oct. 2)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KBWR, KRU, RWW, RYF, FINZ, KRS
Oct. 1, 2015, 8:33 AM
- Added to the Schwab (NYSE:SCHW) ETF OneSource program are the IndexIQ 50 Percent Hedged FTSE Europe ETF (NYSEARCA:HFXE), the IQ 50 Percent Hedged FTSE Intl ETF (NYSEARCA:HFXI), the IQ 50 Percent Hedged FTSE Japan ETF (NYSEARCA:HFXJ), the ProShares Hedged FTSE Europe ETF (NYSEARCA:HGEU), and the ProShares Hedged FTSE Japan ETF (NYSEARCA:HGJP).
- OneSource is now up to 214 ETFs, all of which come with $0 online commissions. In total, the ETFs have $44.2B in assets. YTD flows in the program are $8.1B, or 39% of total ETF flows at Schwab.
Sep. 17, 2015, 2:37 PM
- It'll be at least a little while longer until banks and insurers get the higher rates they are hoping will boost sluggish profits, as the Fed holds its fire this month.
- The "dots" however are still projecting at least one rate hike before year-end.
- The SPDR KBW Regional Banking ETF (KRE -1.4%), and the SPDR KBW Bank ETF (KBE -1.2%).
- BofA (BAC -1.7%), Wells Fargo (WFC -1.2%), Regions (RF -2%), KeyCorp (KEY -1.8%), BB&T (BBT -1.7%), Fifth Third (FITB -2.4%), MetLife (MET -2.2%), Prudential Financial (PRU -1.9%), Schwab (SCHW -2.2%), Ameritrade (AMTD -2%), E*&Trade (ETFC -1.2%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, PSCF, FINZ, KRS
Sep. 15, 2015, 10:43 AM
- In its monthly activity report, Charles Schwab (SCHW +1.4%) notes net new assets for August came to $9.2B.
- That brought total client assets to $2.46T, up 1% Y/Y but down some 4% from July, when it reported $2.54T.
- Interest-earning assets came to a record $160.6B, up 16% Y/Y and up 2% sequentially, which "reflects our continued success in building our client base, as well as our focus on transitioning a significant portion of client sweep cash balances to Schwab Bank as capital levels allow," says CFO Joe Martinetto.
- Client trading volumes were heavy, including a daily record on Aug. 24 of just under 860K revenue trades. Activity has moderated so far in September.
Sep. 8, 2015, 7:49 AM| Sep. 8, 2015, 7:49 AM
The Charles Schwab Corp. provides securities brokerage, banking, and related financial services to individuals and institutional clients. It operates through two segments: Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services to... More
Industry: Investment Brokerage - National
Country: United States
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