Charles Schwab: Buy Rating Amid Robust Growth And Resilience

Moretus Research
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Summary

  • We rate Charles Schwab a Buy with a $111 price target, citing resilient earnings power and platform durability in a higher-rate environment.
  • Schwab's net interest income advantage, disciplined cost management, and core asset growth drive strong EPS growth and margin expansion, outpacing most peers.
  • Our valuation uses a risk-adjusted 22x forward P/E, balancing premium positioning with mean-reversion risk, and offering 22%+ upside and asymmetrical long-term optionality.
  • Key risks include faster-than-expected Fed cuts or deposit attrition, but Schwab's scale and operational discipline make it a differentiated, defensive long-term compounder.
Một người phân tích dữ liệu thị trường chứng khoán trên điện thoại thông minh với các biểu đồ đầy màu sắc được hiển thị, được đặt trên nền giao dịch tài chính

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Valuation Meets Resilience: SCHW in the (Higher)-Rate Glare

We initiate The Charles Schwab Corporation (NYSE:SCHW) at Buy/$111 PT. The Charles Schwab Corporation manages ~$8T+ in client assets through a full-service brokerage, banking, and wealth platform. Behind its brand, Schwab has kept structurally constructing a platform around

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Moretus Research delivers state-of-the-art, buy-side quality equity research for serious investors seeking clarity, conviction, and alpha. We focus on going beyond the obvious. We practice positive paranoia when analyzing investments — understanding sentiment, knowing where our competition is right or wrong, and how that will shape the future of any given security we’re researching. We won’t always be right, but we’re right more often than we’re wrong. More importantly, when we are right, we’re right big. At the beginning of 2023, Oskar Goyvaerts, our CIO, recommended and bought Carvana at $5 per share for our readers — pointing out that the 88% short interest was wildly overblown and that alternative data signaled a looming turnaround. That idea returned more than 60x over three years. Finding another Carvana is unlikely, but we’re confident in our ability to cut through the noise, focus on fundamentals, and uncover a data edge through carefully curated alternative data sources. We cover everything from businesses we own to companies we follow closely because we may want to own them in the future.

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