Yahoo Finance The Charles Schwab Corporation (NYSE:SCHW) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates
The Charles Schwab Corporation (NYSE:SCHW) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Charles Schwab reported US$4.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.68 beat expectations, being 3.3% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Charles Schwab
Taking into account the latest results, the consensus forecast from Charles Schwab's 16 analysts is for revenues of US$19.9b in 2024. This reflects a reasonable 7.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 32% to US$3.16. Before this earnings report, the analysts had been forecasting revenues of US$19.7b and earnings per share (EPS) of US$3.04 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$78.05, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Charles Schwab, with the most bullish analyst valuing it at US$92.00 and the most bearish at US$58.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Charles Schwab's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.0% per year. So it's pretty clear that, while Charles Schwab's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Charles Schwab following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$78.05, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Charles Schwab going out to 2026, and you can see them free on our platform here..
Even so, be aware that Charles Schwab is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
