Financial services giant Charles Schwab (NYSE: SCHW) will be announcing earnings results this Tuesday before market open. Here’s what investors should know.
Charles Schwab met analysts’ revenue expectations last quarter, reporting revenues of $6.48 billion, up 15.8% year on year. It was a mixed quarter for the company, with a beat of analysts’ EPS estimates but a slight miss of analysts’ EBITDA estimates.
Is Charles Schwab a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Charles Schwab’s revenue to grow 18% year on year, slowing from the 24.8% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Charles Schwab has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Charles Schwab’s peers in the investment banking & brokerage segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Goldman Sachs delivered year-on-year revenue growth of 39.5%, beating analysts’ expectations by 23.7%, and Morgan Stanley reported revenues up 27.1%, topping estimates by 8.7%. Goldman Sachs traded up 9.9% following the results while Morgan Stanley was down 4.1%.
Read our full analysis of Goldman Sachs’s results here and Morgan Stanley’s results here.
There has been positive sentiment among investors in the investment banking & brokerage segment, with share prices up 6.9% on average over the last month. Charles Schwab is up 10.8% during the same time and is heading into earnings with an average analyst price target of $120.74 (compared to the current share price of $102).
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