Charles Schwab Corporation
SCHW
$107.99
+0.36%
The Charles Schwab Corporation is a leading US financial services firm offering brokerage, banking, asset management, custody, and wealth management solutions to retail investors and registered investment advisors (RIAs). With $11.9 trillion in client assets, Schwab is a dominant player in the RIA custody market, holding over 40% market share, and is recognized for its low-cost, client-centric model. The current investor narrative centers on the company's ability to grow revenue and earnings amid a high-interest-rate environment, which boosts net interest income, while also navigating competitive pressures from fintech disruptors and regulatory changes. Recent analyst actions, including a price target cut from Morgan Stanley, have introduced near-term uncertainty, but the stock's strong 3-month rally suggests optimism about its growth trajectory.…
SCHW
Charles Schwab Corporation
$107.99
Related headlines
SCHW 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Charles Schwab Corporation's 12-month outlook, with a consensus price target around $125.00 and implied upside of +15.8% versus the current price.
Average Target
$125.00
0 analysts
Implied Upside
+15.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$91 - $145
Analyst target range
Schwab is covered by 20 analysts, with a consensus recommendation of 'Buy' and a mean rating of 1.73 (where 1 is Strong Buy and 5 is Sell). The average price target is $125.00, implying an upside of 16.1% from the current price of $107.66. The analyst sentiment is bullish, with 10 recent ratings including Overweight and Buy actions from major firms like Morgan Stanley, Barclays, and UBS, and no downgrades in the last three months. The target price range spans from $91.00 (low) to $145.00 (high), indicating a wide dispersion of expectations. The high target of $145.00 assumes continued strong earnings growth, possibly driven by higher interest rates and successful integration of recent acquisitions, while the low target of $91.00 reflects concerns about competitive pressures and potential margin compression. The wide range suggests significant uncertainty about the stock's future performance, but the overall bullish consensus and the recent positive analyst actions support a favorable outlook.
Bulls vs Bears: SCHW Investment Factors
Schwab presents a compelling bull case with accelerating revenue growth, expanding margins, and a forward valuation that appears attractive relative to its growth. The bear case centers on the premium trailing multiple and sensitivity to interest rates, which could compress earnings if rates fall. Currently, the bull case has stronger evidence given the strong Q1 results and analyst optimism, but the key tension is whether the market's expectations for continued earnings growth are realistic. If interest rates remain elevated and Schwab continues to execute, the stock could re-rate higher; conversely, any slowdown in net interest income or competitive disruption could lead to multiple compression.
Bullish
- Strong Revenue Acceleration: Q1 2026 revenue grew 9.77% YoY to $7.30B, with sequential growth from $6.82B in Q2 2025 to $7.30B in Q1 2026, indicating accelerating momentum. This is driven by higher interest income ($3.96B) and asset management fees, reflecting the firm's scale and rate environment.
- Expanding Profitability: Net margin improved to 33.96% in Q1 2026 from 28.71% a year earlier, and gross margin expanded to 88.79% from 84.20%. Operating leverage is driving significant bottom-line growth, with EPS rising from $0.99 to $1.37 YoY.
- Undervalued on Forward Earnings: Forward PE of 13.80x is below the sector average of 15x, while PEG ratio of 0.38x indicates undervaluation relative to growth. Analysts expect EPS to rise to $10.25 next year, implying a 38% earnings growth rate, which supports the current valuation.
- Strong Analyst Consensus: With 20 analysts, consensus is 'Buy' (mean rating 1.73), and average price target of $125.00 implies 16.1% upside. Recent actions include Overweight/Buy from Morgan Stanley, Barclays, and UBS, with no downgrades in the last three months.
Bearish
- Premium Trailing Valuation: Trailing PE of 21.35x is 42% above the industry average of 15x, indicating the market already prices in superior profitability. If growth disappoints, multiple compression could be significant, as seen in the 52-week low of $83.96.
- Interest Rate Sensitivity: Net interest income is a major revenue driver ($3.96B in Q1 2026). A shift to lower interest rates could compress margins and reduce earnings, as the company's profitability is highly correlated with the rate environment.
- Competitive Pressures: Fintech disruptors like Robinhood and Interactive Brokers are growing rapidly (Interactive Brokers grew accounts 34% YoY), potentially eroding Schwab's market share in retail brokerage. The SEC's removal of the PDT rule could benefit competitors more.
- Recent Price Target Cut: Morgan Stanley recently cut its price target, introducing near-term uncertainty. Although the stock retains a 'buy' rating, such actions can signal concerns about growth sustainability or margin pressure.
SCHW Technical Analysis
SCHW is in a clear recovery uptrend, with the stock trading at $107.66 as of August 6, 2026, up 11.32% over the past year. The current price sits at 98.7% of its 52-week range (between $83.96 low and $109.05 high), indicating strong momentum near the upper end of its range. This positioning suggests the market is rewarding the stock for its recent performance, though it also raises the risk of overextension if the rally stalls. The 1-year gain of 11.32% underperforms the S&P 500's 21.46% return, but the stock has been catching up recently, with a 3-month gain of 21.50% versus the SPY's 4.19%.
Beta
0.75
0.75x market volatility
Max Drawdown
-20.4%
Largest decline past year
52-Week Range
$84-$109
Price range past year
Annual Return
+11.2%
Cumulative gain past year
| Period | SCHW Return | S&P 500 |
|---|---|---|
| 1m | +4.7% | +2.4% |
| 3m | +19.7% | +4.7% |
| 6m | +13.1% | +11.7% |
| 1y | +11.2% | +21.3% |
| ytd | +6.3% | +13.4% |
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SCHW Fundamental Analysis
Revenue growth has been robust, with Q1 2026 revenue of $7.30 billion, up 9.77% year-over-year, and a clear acceleration from the prior quarters: Q2 2025 revenue was $6.82 billion, Q3 2025 was $7.04 billion, and Q4 2025 was $7.17 billion. The growth is driven by higher interest income, which reached $3.96 billion in Q1 2026, and strong asset management fees, reflecting the firm's scale. The company's profitability is impressive, with a net income of $2.48 billion in Q1 2026, translating to a net margin of 33.96%, up from 28.71% in Q1 2025. Gross margin expanded to 88.79% in Q1 2026 from 84.20% a year earlier, driven by operating leverage and a favorable mix shift toward higher-margin businesses. Schwab's balance sheet is solid, with a debt-to-equity ratio of 0.63 and a current ratio of 0.53, which is typical for a financial institution. Free cash flow for the trailing twelve months was $9.72 billion, and the company generated $7.34 billion in operating cash flow in Q1 2026, easily covering its capital expenditures of $140 million and dividends of $632 million. Return on equity stands at 17.91%, reflecting strong shareholder value creation.
Quarterly Revenue
$7.3B
2026-03
Revenue YoY Growth
+9.8%
YoY Comparison
Gross Margin
88.8%
Latest Quarter
Free Cash Flow
$9.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is SCHW Overvalued?
Given Schwab's positive net income, the PE ratio is the most appropriate valuation metric. The trailing PE is 21.35x, while the forward PE is 13.80x, implying the market expects significant earnings growth, with EPS estimated to rise to $10.25 in the next fiscal year. This forward discount is substantial, suggesting the market is pricing in a strong recovery in earnings, likely driven by continued net interest income expansion. Compared to the industry average, Schwab's trailing PE of 21.35x is at a premium to the sector's average of 15x, a 42% premium, reflecting its superior profitability and market position. However, the forward PE of 13.80x is actually below the sector average of 15x, indicating that the market expects Schwab's earnings growth to outpace its peers, justifying the premium on a forward basis. Historically, Schwab's PE has ranged from 15.59x (Q1 2023) to 33.73x (Q4 2023), and the current trailing PE of 21.35x is in the middle of this range, suggesting the stock is fairly valued relative to its own history. The PEG ratio of 0.38x indicates the stock is undervalued relative to its growth rate, making it an attractive value proposition.
PE
21.3x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 16x~34x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Schwab's profitability is heavily dependent on net interest income, which comprised 54% of Q1 2026 revenue. A decline in interest rates would directly reduce this income stream, potentially impacting earnings significantly. The company's debt-to-equity ratio of 0.63 and current ratio of 0.53 indicate a reliance on short-term funding, which could be a liquidity risk in a stressed environment. However, strong free cash flow of $9.72B TTM and operating cash flow of $7.34B in Q1 2026 provide a cushion. Revenue concentration in interest income and asset management fees makes the company sensitive to market conditions, but diversification across business lines mitigates some risk.