Charles Schwab (SCHW) Stock Forecast & Price Target

Charles Schwab has demonstrated robust engagement among its retail trading customers, with daily average trades (DATs) increasing approximately 30% year-over-year to around 7.4 million. Additionally, pledged asset lending (PAL) growth remains strong at 11% sequentially, contributing to a year-to-date growth of 49%, while the capital ratios have improved, indicated by a 60 basis point increase in the adjusted Tier 1 leverage ratio to 7.3%. The firm also achieved an annualized seasonally adjusted revenue growth of 5.8%, its strongest performance in over two years, coupled with nearly 7% net account growth, positioning Schwab favorably for future revenue expansion.

Charles Schwab faces challenges primarily due to modest declines in net interest income (NII), which market consensus may not fully account for concerning the lower rate environment. Expected growth metrics indicate that new net asset flows have recently dropped below 5%, compounded by integration difficulties following the TD Ameritrade acquisition. Furthermore, potential macroeconomic disruptions and the risk of sustained increases in long-term interest rates present additional headwinds, likely affecting the firm's capital return strategy and overall financial health.