Charles Schwab (NYSE:SCHW) Corp Share Value Drops

Charles Schwab Corporation experienced a 3.9% drop in share value on Friday following the release of its November metrics, which drew mixed reactions from industry analysts.

The financial services firm reported that core net new assets from new and existing clients reached $28.8 billion, reflecting a 17% rise from the previous month. Additionally, Schwab’s total client assets increased by 4.6% to $10.31 trillion, while new brokerage accounts grew by 7.9%, totaling 357,000.

The company updated its full-year net revenue growth forecast to between 3.0% and 3.5%, an increase from the earlier 2.0% to 3.0% range predicted during the Fall Business Update in October. This improved outlook is attributed to heightened investor engagement, post-election equity market strength, and stabilization of client transactional sweep cash balances.

Analyst Responses:
– Analysts at TD Cowen reacted positively to the raised revenue guidance for fiscal year 2024, hinting at a fourth-quarter estimate of approximately $0.90, which exceeded the consensus estimate. However, they noted that asset flows and month-over-month cash accumulation fell short of expectations.
– Citi analysts highlighted robust trading activity and margin balance growth, with a 4% sequential average increase. They observed that net new assets were below projections and anticipated a slower December trading activity. Nonetheless, Citi expects upward pressure on consensus estimates based on quarter-to-date trends.
– Keefe, Bruyette & Woods noted cash balances remained consistent with the previous month, reflecting a nominal increase in net new assets from October, although this growth failed to meet historical standards. They implied expectations for modest cash growth that did not materialize.
– Analysts at JPMorgan pointed out stable month-over-month client transactional sweep, indicating consistent client cash levels, which suggests that Schwab continues to effectively manage high-cost short-term borrowing.

This article was generated with the support of AI and reviewed by an editor. For more information, see our T&C.