Charles Schwab stock rose Wednesday as an upgrade pointed to improving growth and balance sheet metrics. Meanwhile, BofA put out a cautious note as banks and financial companies prepare to report first-quarter results late next week.
Citi in a Wednesday research note said it sees potential for an improving net new assets story as Charles Schwab "shifts to offense," The Fly reported. The financial firm has completed integrations from its $26 billion Ameritrade acquisition in 2019. Meanwhile, investment spending should accelerate Schwab's growth, analyst Christopher Allen wrote. Citi said it sees an improving capital return story for Charles Schwab, while continued progress on paying down short-term funding offers a "clear path to lifting the balance sheet clouds."
Citi upgraded Charles Schwab stock to buy from neutral and raised its price target to 102 from 85. The target was more than 31% above where share closed on Tuesday.
Previously, Schwab on March 14 reported that core net new assets for February jumped 44% year over year to $48 billion. Total client assets were $10.28 trillion at month-end, up 16% from February 2024. Customers opened 362,000 new brokerage accounts for the month, marking 15 straight months of at least 300,000 new account openings.
The Citi note comes ahead of bank earnings next Friday, with JPMorgan Chase, Wells Fargo and BlackRock to report.
Elsewhere, BofA in a Wednesday note said it expects banks to strike a cautious tone for Q1 results, according to The Fly. The firm predicts that JPMorgan, Wells Fargo and Morgan Stanley will emphasize downside risks driven by policy uncertainties. BofA thinks it's "too soon to expect meaningful credit cracks," but there is potential for increases to reserve builds based on the macro environment, as well as increased weighting to downside scenarios.
Charles Schwab, Bank Stocks
SCHW stock rose 1.2% Wednesday.
Charles Schwab is working on a handle for its current, seven-week base. The handle has lagged below support at the stock's 50-day moving average.
Shares hold a 6.2% gain so far this year.
JPMorgan stock inched higher Wednesday. Wells Fargo climbed 1.3%..
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
