Charles Schwab Corporation (NYSE: SCHW) has confirmed that it will release its Q4 2021 earnings results on Tuesday, January 18, 2022, before the market open.
What to look for
The company is focused on improving its trading revenue that has been under pressure in recent times. As a result, Charles Schwab is undertaking various initiatives that include lowering ETF trade commissions and basic online equity and cutting fees for its market capitalization-weighted index mutual funds. Recently it launched Schwab Stock Slices that will allow investors to own its shares in the S&P 500 index from as low as $5 per share despite the shares costing more. The initiatives seek to build client bases, and the TD Ameritrade acquisition will result in additional enhancement in trading income for the company.
Earnings: Stockearning’s Estimated EPS for the fourth quarter is expected to be $0.87 per share. The company expects a 20.2% earnings growth rate for the current year. In the third quarter, the company produced an earnings surprise of 5% with an EPS of $0.84. Historical EPS Performance shows that in the past 12 quarters, the company has topped estimates eight times (66%) and missed thrice (25%).
Revenue: in the third quarter, the company had reported a net income of $1.5 billion relative to $1.3 billion in Q2 2021. For the nine months ending September 30, 2021, the company reported a net income of $4.3 billion. The results included TD Ameritrade following the completion of its acquisition.
Stock movement: SCHW shares have gained 22.3% since the company released its third-quarter earnings. Interestingly, SCHW shares have been UP 27 times out of the past 47 quarters. So, the historical price reaction suggests a 57% probability of the share price going UP once the company reports its fiscal Q4 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 2%, while the predicted move on the seventh day is 3%.
What analysts are saying
Deutsche Bank analyst Brian Bedell raised his price target on SCHW shares from $1209 to $122 and maintained a Buy rating in the stock. In a research note reviewing Q4 reports from asset managers, exchanges and brokers, the analyst said that primary interest rate sensitive stocks that he covers, trusts banks, and SCHW possess the best return/rusk profile ahead of the fourth-quarter earnings season.
JMP Securities analyst Devin Ryan downgraded the stock from "Buy" to "Hold" as part of his wider coverage in Brokers and investment banks. In a research note, the analyst told investors that while he is optimistic about SCHW's potential, the stock is hitting valuation limits and lowering risk/reward potential.
Piper Sandler analyst Richard Repetto also raised his price target from $90 to $100 but maintained a “Buy” on the shares. In a research note, the analyst told investors that elevated volume drivers for electronic brokers are likely to sustain this year with potential expansion to credit and upside to fourth-quarter consensus for estimates.
Related News
TD SYNNEX (NASDAQ: SNX) Earnings Expectations, EPS of $2.6 on Revenue of $15 to $16 Billion
Organigram Holdings Inc. (NASDAQ: OGI) Earnings Expectations, Revenue Of 23.44 Million