Charles Schwab Corp (SCHW) saw improvements over the past few months and outperformed the S&P 500. Despite recent gains, the shares of Charles Swab have fallen approximately 10% compared to the S&P’s loss of about 19% over the past year. Hedge funds were actively buying the stock in the second quarter, and this financial services company was added to the WhaleWisdom WhaleIndex on August 16, 2022.
Charles Schwab is a multinational financial services company that provides banking and trust services, retail brokerage, corporate brokerage, retirement, and investment advisory services to institutional and individual customers. Charles Schwab has a strong history as an investment services firm. The company’s stock trading tools are designed to help investors with stock selection and trading. The opportunity to choose from its varying levels of investment support pairs well with the ongoing trend of do-it-yourself investing.
Mixed Actions from Hedge Funds and Institutions
Looking at the second quarter activity by hedge funds, Charles Schwab saw an increase of approximately 2.4% in the aggregate 13F shares held, bringing shares held to about 346.4 million from 338.2 million. Of the hedge funds, 29 created new positions, 136 added, 41 exited, and 87 reduced their holdings. In contrast to hedge funds, institutions were selling, and overall, institutions decreased their aggregate holdings by about 0.4% to approximately 1.317 billion.
Positive Multi-year Figures
Analysts expect to see earnings rise, with increases in growth that could bring earnings to
$4.91 by December 2023, up from an estimated $3.92 for December 2022. Estimates are also optimistic for revenue, with an anticipated rise by the end of 2022 to approximately $20.8 billion. Continued momentum may bring revenue of about $23.6 billion by December 2023. Charles Schwab’s long-term 13F metrics between 2004 and 2022 suggest that their investment potential remains strong.
Optimistic Analysts though Price Targets Vary
Analysts’ views vary on Charles Schwab, but there appears to be overall optimism. Analyst Brian Bedell of Deutsche Bank Securities lowered the firm’s price target on Charles Schwab to $95 from $99 while maintaining a Buy rating on shares. Bedell is cautious about the stock but recognizes the positive side of Charles Schwab’s recent price declines, including good long-term entry points for investors. Erste Group’s analyst, Hans Engel, upgraded Charles Schwab to a Buy from a Hold due to the investment services company’s earnings growth in 2022 and expected future growth. Daniel Fannon of Jefferies & Co. maintained a Buy rating on Charles Schwab and raised the firm’s price target to $86 from $78.
Favorable Outlook
Charles Schwab’s growth has slowed in 2022, but its earnings history and estimates for 2023 are encouraging for investors. Continued demand for its financial services and analysts’ ratings and price targets support the company’s growth potential in the coming year. Patient investors may see the stock as a long-term opportunity. Charles Schwab is worth watching as it continues to regain ground.