Charles Schwab stock is the IBD Stock Of The Day for Tuesday. Shares are nearing a buy point after a recent upgrade following the broker's earnings report from mid-April.
Goldman Sachs on April 25 upgraded Charles Schwab stock to buy from neutral, citing a healthy balance sheet and strong growth amid "an environment that remains highly uncertain," according to reports.
Analysts led by Alexander Blostein noted that Schwab has been paying off short-term debt that was accumulated in recent years, which should help accelerate net interest income revenue. Charles Schwab has also been building excess capital, which could lead to significant share repurchases. The broker is also showing signs of durable organic growth and is back within Schwab's target range of 5% to 7%.
Blostein updated his earnings expectations for the next few years. For 2025, he expects Charles Schwab to report earnings of $4.44 per share, growing to $5.03 in 2026 and $6.29 in 2027. FactSet analysts expect 2025 earnings of $4.27 per share, up 31%. They expect that to grow to $5.07 per share in 2026 and $5.90 per share in 2027.
Goldman Sachs set a price target of 100 for Charles Schwab stock, which represents about a 24% premium to Tuesday's level.
Morgan Stanley on April 8 also upgraded Charles Schwab stock to overweight, Barron's reported. The firm at the time said it views Schwab as having a more defensible earnings profile and a brand that could do well amid a tough macro backdrop. Morgan Stanley wrote that it is shifting preferences "toward names less levered to retail trading, and more geared to defensive and durable growth."
Earnings Beat
Elsewhere, Charles Schwab on April 17 topped estimates for Q1 results. Earnings increased 41% to $1.04 per share adjusted, beating FactSet estimates for $1.01 per share. Net revenue jumped 18% to $5.59 billion, also clearing views for $5.53 billion.
Internal metrics also improved.
Schwab recorded $137.7 billion in net new assets, representing a 44% increase from last year. Total client assets rose 9% to $9.93 trillion.
Brokerage account openings rose 8%, bringing the active total to 37 million.
Schwab's managed investment solutions business saw a 15% increase in net inflows from last year, which set a new quarterly record.
Meanwhile, daily average trading volume jumped 17% quarter-over-quarter, driven by a sharp increase in market volatility, Schwab reported.
The broker also repurchased $1.5 billion shares during the quarter and boosted its dividend by 8% to 27 cents per share.
Charles Schwab Stock Performance
SCHW shares edged higher Tuesday, trading tightly over the past few sessions.
Charles Schwab stock is trading slightly below an 81.24 buy point from a double-bottom base. SCHW stock rebounded from a 2025 low of 65.88 intraday on April 7.
Shares are up about 8% so far this year and holding above their key moving averages.
Charles Schwab stock has a 21-Day ATR% of 4.51%.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
IBD currently recommends 40% to 60% stock exposure based on the current market.
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