Charles Schwab Q2 revenue beats estimates on client asset growth
SCHW•Outlook and key details
- Company did not provide specific guidance for future quarters or the full year in its press release
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q2 Revenue | Beat | $7.07 bln | $6.89 bln (13 Analysts) |
| Q2 Adjusted EPS | Beat | $1.62 | $1.55 (17 Analysts) |
| Q2 EPS | $1.54 | ||
| Q2 Net Income | $2.80 bln | ||
| Q2 Net Interest Margin | 3.00% |
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 18 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell". The average consensus recommendation for the investment banking & brokerage services peer group is "buy". Wall Street's median 12-month price target for Charles Schwab Corp is $121.00, about 18% above its July 20 closing price of $102.54. The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 15 three months ago.
Quarterly results and drivers
- U.S. financial services firm's Q2 revenue rose 21% yr/yr, beating analyst expectations
- Adjusted EPS for Q2 rose 42% yr/yr, beating analyst expectations
- Company repurchased $1.0 bln in shares during the quarter
Schwab said record core net new assets and total client asset growth drove results, with $119.8 bln in core net new assets, up 49% yr/yr. Record trading activity, increased use of managed investing solutions, and higher margin loan balances contributed to revenue growth, according to CEO Rick Wurster. Growth in net interest revenue, asset management fees, and trading revenue supported overall revenue increase, per CFO Mike Verdeschi.
