This week, Charles Schwab (SCHW) stock increased following the disclosure of its quarterly earnings report, citing an "improved macroeconomic environment" for its performance exceeding expectations.
Schwab (NYSE:SCHW) exceeded analyst expectations with a first-quarter earnings per share (EPS) of 74 cents, a decrease from last year's corresponding period when the figure stood at 93 cents. Expectations were still surpassed despite a 7.3% decline to $4.74 billion in revenue.
SCHW Earnings Report Review
In contrast to the previous year, when it generated $1.6 billion or 83 cents per share, Schwab's net income for the quarter decreased to $1.36 billion or 68 cents per share. Although adjusted earnings per share decreased from 93 to 74 cents, they still exceeded analyst expectations.
The 7.3% revenue decline to $4.74 billion was marginally higher than anticipated. In contrast, asset management and administration fees rose by 20.6% to $1.35 billion, whereas net interest revenue declined by 19.4% to $2.23 billion. 8.4% less in trading revenue, or $817 million, was generated.
Client transactional sweep cash balances remained stable in March at $399.2 billion compared to the preceding months. Analysts anticipate a sustained upward trajectory and a surge in earnings power by 2025.
Nevertheless, total net new assets decreased by 41.5% to $88.2 billion, and per-trade revenue fell by 7.8% to $2.25. Likewise, bank deposits decreased by 17.3% to $269.5 million.
Analysts' Opinion on SCHW
In the wake of the earnings report, Chief Executive Officer Walt Bettinger conveyed a sense of optimism regarding the company's future, emphasizing favorable developments across a range of metrics, including investor engagement, revenue, and earnings.
In general, Charles Schwab exhibited a robust performance during the initial quarter, characterized by enhanced net interest income and proficient cost management. Analysts increased price targets and reiterated positive ratings in light of the company's resilient performance and optimistic outlook.
SCHW Stock Forecast Technical Analysis
The daily market trend for SCHW stock is bullish as the recent price aimed higher by creating new swings. Moreover, the dynamic 20 day EMA remains below the current Charles Schwab stock price as an immediate support line.
As per the Fibonacci Extension line, the recent dip from the 71.49 high to the 59.69 low shows a potential extension possibility to the 161.8% Extension level at the 78.79 level.
Based on the current market structure, the recent bullish rejection from the 69.44 support level could increase the SCHW stock price towards the 80.00 to 84.00 zone. However, a downside correction is possible, where a daily close below the 69.00 line might lower the Schwab stock price towards the 59.69 support level.
