Has Charles Schwab (NYSE:SCHW) finally turned a corner? Are better days ahead for this bank stock? Some analysts think that’s the case, and the call for a revival is coming in just a little louder today with one new analyst tilting over. It was enough to spark the imaginations of investors, who sent Schwab stock higher at the time of writing.
The newest word came from Raymond James analyst Patrick O’Shaughnessy, who noted that client cash sorting is finally easing, meaning that these headwinds should be grinding to a halt. With cash sorting finally winding down, the result, according to O’Shaughnessy, should be support for Schwab’s balance sheet and stabilization in its net interest margins. Such risks, O’Shaughnessy noted, are just part of the package for a business model like Schwab’s, and with few other risks involved, Schwab should come out ahead.
Indeed, Schwab is still seeing interested parties depositing money, despite an element of overall concern about the entire banking sector. If customers think that Schwab is more likely to survive the current conditions than other banks, that should ultimately put it in a better position to survive. Not that it wasn’t already in a good position thanks to its sheer mass of cash on hand, but new income is generally better than net outgo.
By and large, most analysts are with O’Shaughnessy. With 11 Buy ratings, four Holds, and two Sells, Charles Schwab stock is considered a Moderate Buy by analyst consensus. With an average price target of $64.35, meanwhile, it offers a 24.9% upside potential.
