Deutsche Bank Reiterates Buy On Charles Schwab, $35 PT


In a research report issued today, Deutsche Bank analyst Brian Bedell reiterated a Buy rating on Charles Schwab (NYSE:SCHW) with a price target of $35.00.

Bedell noted, “SCHW’s 3Q14 EPS of $0.24 was in line with Consensus and our estimate of $0.24. However, we view core EPS close to $0.25, excluding a net pretax insurance recovery of $45mn, our estimate of ~$10mn in securities gains and a pretax charge of $68mn related to future changes in SCHW’s geographic footprint. The beat to our forecast on a core basis was driven by 2% higher revenue than expected, with 2% beat on NII and 1% beat on asset mgmt fees. Overall, we see it as a solid quarter with good continued traction in fee-generated assets, stable NIM despite lower yields, & good cost control w/core op margin of 36% vs our 35% est. SCHW remains our top pick in e-brokers. SCHW shares beginning to price in lower-for-much longer rate scenario With SCHW shares down 18% from September peak to current $25.32 we see the stock valued much more closely to a stagnant multi-year interest rate scenario than our rate normalization base case.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Bedell has a total average return of -4.5% and a 28.6% success rate. Bedell has a 2.9% average return when recommending SCHW, and is ranked #2889 out of 3335 analysts.

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