Barclays Upgrades Robinhood and Charles Schwab

Investing.com — Barclays upgraded Robinhood Markets Inc (NASDAQ:HOOD) and Charles Schwab Corp (NYSE:SCHW) to "overweight," citing improved market conditions and growth opportunities for brokers and alternative asset managers for 2025.

While Robinhood is expected to benefit from its growth strategy driven by an evolving crypto landscape, Schwab is anticipated to see earnings growth as cash sorting issues and attrition from past mergers decrease. Both companies are well-positioned to take advantage of a favorable macro backdrop, according to Barclays (LON:BARC).

For alternative asset managers, Barclays predicts a resurgence in transaction activity fueled by pent-up demand and a positive shift in sentiment. Key themes such as private credit, data centers, and infrastructure are expected to remain strong.

Among traditional asset managers, BlackRock (NYSE:BLK) continues to be Barclays’ top pick.

In contrast, the outlook for exchanges is less optimistic. Barclays downgraded Cboe Global Markets (NYSE:CBOE) to "equal weight," citing difficult comparisons and near-peak valuations.

The brokerage sector is anticipated to broadly benefit from stable equity markets and rising interest rates, which supported robust performance in 2024. Schwab, in particular, is positioned for significant medium-term earnings growth as cash levels stabilize and funding costs decrease.