Why Charles Schwab Stock Bumped Higher on Friday
Key Points
No less than three analysts raised their price targets on the veteran financial services company.
Two of the three were fairly modest, however.
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On Thursday, Charles Schwab (NYSE: SCHW) held its annual Institutional Investor Day, and the following trading session, several analysts issued bullish updates on the stock. Aided by that tailwind at its back, Schwab's shares added nearly 2% in value on Friday.
Good news about guidance
One notable aspect of Schwab's presentation to its audience was management's raise of certain guidance items. Specifically, it's now modeling annual revenue growth of 14% to 15% for this year, up from 9.5% to 10.5% previously. Net interest margin, a critical metric for many financial companies, is expected to be 3% to 3.1%, up from the preceding forecast of 2.85% to 2.95%.
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By my count, three analysts raised their Schwab price targets on Friday. Barclays' Benjamin Budish now feels the stock is worth $127 per share, up from his previous $117. He maintained his overweight (i.e., buy) recommendation.
His peers, Patrick Moley of Piper Sandler and Bill Katz of TD Cowen, both enacted more modest raises. Moley, who held fast to his neutral rating, added $2 per share, bringing the figure to $105. The more optimistic Katz bumped his target to $109 from $108 while keeping his buy recommendation intact.
One for the long haul
Anyone like me who believes the securities markets will remain lively should consider snapping up shares of Schwab. The company is not only a top brokerage in many of those markets but also one of the more diversified businesses in its niche, drawing revenue from many lucrative sources. I have no plans to sell my Schwab stock at all.
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Charles Schwab is an advertising partner of Motley Fool Money. Eric Volkman has positions in Charles Schwab. The Motley Fool recommends Barclays Plc and Charles Schwab and recommends the following options: short June 2026 $97.50 calls on Charles Schwab. The Motley Fool has a disclosure policy.
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