54.69 -0.79 (-1.42%)
Pre-market: 4:00AM EDT
|Bid||0.00 x 900|
|Ask||59.94 x 1800|
|Day's range||55.02 - 55.70|
|52-week range||38.06 - 60.22|
|PE ratio (TTM)||31.33|
|Earnings date||16 Jul 2018 - 20 Jul 2018|
|Forward dividend & yield||0.40 (0.71%)|
|1y target est||61.47|
Schwab's (SCHW) revenues are likely to continue improving, driven by steady increase in client assets and average interest earning assets.
Charles Schwab (SCHW) is expected to report strong numbers in the second quarter mainly due to supportive macro fundamentals and higher expected interest income sequentially. The Fed’s meeting, which ended on June 13, showed that it will increase interest rates faster than predicted. The Fed’s hawkish stance would likely be beneficial for brokerages (VFH) like TD Ameritrade (AMTD), Interactive Brokers Group (IBKR), and E*TRADE Financial (ETFC). According to data released on June 14, Charles Schwab ended May with total client assets of $3.38 trillion—a month-over-month rise of 2% and the substantial YoY (year-over-year) rise of 13%.
After looking at The Charles Schwab Corporation’s (NYSE:SCHW) latest earnings announcement (31 March 2018), I found it useful to revisit the company’s performance in the past couple of years andRead More...
Overwhelming, the primary beneficiaries of these trends haven’t been the major Wall Street banks, or portfolio managers or financial advisers, but the investors themselves. Research and advice have become more readily accessible, and backed by a push toward fiduciary standards, meaning advisers must act in the best interest of their clients, as opposed to recommending strategies that may be less suitable, but which could net the adviser higher commissions. “There’s never been a better time to be an investor,” said Kunal Kapoor, the chief executive officer of investment-research giant Morningstar (MORN) , who spoke at his company’s annual investment conference.
Strong fundamentals and higher interest rates will support Schwab's (SCHW) profitability while persistently rising operating expenses remain a major concern.
The Federal Reserve lifted interest rates by a quarter point and signalled that two more increases are likely in 2018 as policymakers gave a bullish assessment of the US economy amid accelerating growth and rapid job creation. The Federal Open Market Committee raised the target range for the federal funds rate from 1.75 to 2 per cent, in the seventh increase of the current cycle and the second this year. In a statement, the central bank dropped previous crisis-era assurances that it would keep rates below their longer-run norms.
Morningstar CEO Kunal Kapoor had a different message to deliver at this year's Morningstar Conference—its 30th. Kapoor explained that last year, it was: “There’s never been a better time to be an investor,” because fees were dropping and technologically driven tools were on the way. Kapoor, who was the subject of a Barron’s cover story, talked about how Morningstar is positioned for the future of investing, discussing sustainable investing, its tech-enhanced advisor tools, and its latest AI-driven quantitative analyst-rating system, which would help the firm cover a wider swath of funds that may otherwise not get the Morningstar treatment. It’s hard to have bandwidth,” Kapoor said.
Financial advisors are basically active managers when it comes to serving clients’ needs, says Charles Schwab CEO Walt Bettinger.
TD Ameritrade’s (AMTD) performance will likely depend on the economic and political factors prevailing in the economy. In the quarter that ended in March, TD Ameritrade’s performance was supported by strong volatility due to the Trump Administration’s announcement about imposing tariffs and interest rate hike expectations. For the company, a rising interest rate environment would mean higher interest income from interest-earning assets, which would boost the interest income.
TD Ameritrade (AMTD) is expected to report an EPS of $0.8 in the fiscal third quarter, which ends in June. Wall Street analysts gave a high estimate of $0.85 and a low estimate of $0.76 for the third-quarter EPS. Sequentially, the company is expected to witness a marginal decline in its trading volumes in the third quarter due to less volatility in April.
TD Ameritrade (AMTD) operates in a very competitive industry. The company needs to retain its clients in order to experience long-term growth. There’s a pressing need to come up with digital tools to make trading easy and accessible.
TD Ameritrade (AMTD) benefited from clients’ higher trading activities in the second quarter, which ended on March 31. Brokerages’ performance would be boosted if equity markets experience high volatility. The volatility would lead to more trading among clients and improve the trading revenues.
Of the six analysts covering Interactive Brokers (IBKR), two recommend “strong buy,” two recommend “hold,” and two recommend “strong sell.” Last month, their ratings were the same. In March, just five analysts were covering the stock, with one recommending “strong buy,” two recommending “hold,” and two recommending “strong sell.”
In the first quarter, Interactive Brokers (IBKR) exceeded analysts’ EPS and revenue expectations, like peers (VFH) Charles Schwab (SCHW) and E*TRADE Financial (ETFC). Meanwhile, competitor TD Ameritrade (AMTD) missed analysts’ EPS estimate but beat their revenue estimate.
Interactive Brokers (IBKR) has an NTM (next-12-month) PE ratio of 32.7x, which is higher than peers’ average of 18.5x. The company’s competitors’ NTM PE ratios are as follows: TD Ameritrade (AMTD): 16.5x Charles Schwab (SCHW): 21.9x E*TRADE Financial (ETFC): 17.0x
Blockchain, the company, which is the world's No. 1 provider of free wallet software for storing cryptocurrency, hit a significant milestone this week.
In the first quarter, trade tensions and interest rate hike expectations made equity markets volatile, resulting in brokerages’ (VFH) customers trading more and boosting brokerages’ revenue. DARTs (daily average revenue trades) are often used to assess brokerages’ performance. The higher the DARTs, the higher brokerages’ trading revenue. However, brokerages’ performance can be impacted by financial downturns, as they limit trading.
Interactive Brokers (IBKR) drew market participants’ attention in the first quarter, primarily because of expectations of higher interest rates and strong volatility. Higher interest rates can improve brokerages’ (VFH) performance, boosting their interest income.
Stock futures were little changed Thursday. President Trump ordered a probe into whether auto imports undermine national security. Apple, Nvidia, Charles Schwab, Microsoft and Splunk are top stocks holding near buy zones.
In May, E*TRADE Financial (ETFC) is tracked by 17 analysts. Nine analysts suggested a “strong buy” for ETFC, and two gave “hold” ratings. The remaining six analysts suggested a “buy” on E*TRADE Financial. These ratings are unchanged from April.
E*TRADE Financial’s (ETFC) price-to-earnings ratio is ~17.1x. This highlights its discounted valuation versus the average PE ratio of its peers of ~24.1x. Among the company’s competitors, Charles Schwab (SCHW), TD Ameritrade Holding (AMTD), and Interactive Brokers Group (IBKR) have price-to-earnings ratios of ~22.5x, ~16.7x, and ~33.1x, respectively, on a next-12-months (or NTM) basis.
Charles Schwab (SCHW) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Of the 21 analysts covering Charles Schwab (SCHW), eight recommend “strong buy,” five recommend “buy,” seven recommend “hold,” and one recommends “sell.” There were no “strong sell” recommendations.