Charles Schwab (NYSE: SCHW) is scheduled to report its fiscal Q3 2023 results on Monday, October 16, 2023. We expect the company to top the consensus estimates of revenues and earnings. The company posted better-than-expected results in the last quarter, despite a 9% y-o-y decrease in the net revenues to $4.66 billion. The top line mainly suffered due to lower net interest income, followed by a drop in bank deposit account fees and trading income. That said, asset management and administration fees grew 12% in the quarter. We expect the same trend to continue in the third quarter. Our interactive dashboard analysis on Charles Schwab’s Earnings Preview has more details.
Our forecast indicates that Charles Schwab’s valuation is $73 per share, which is 41% above the current market price of around $52. Interestingly, Charles Schwab stock had a Sharpe Ratio of 0.2 since early 2017, which is lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.24 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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