Charles Schwab stock underperformed due to banking segment struggles but asset management thrived

From Nasdaq: 2025-01-01 22:14:55

Charles Schwab (NYSE: SCHW) stock has seen an 11% increase year-to-date, compared to the S&P 500’s 25% gain. Morgan Stanley, owner of E-trade, is up by 35%. Schwab’s banking segment struggled due to cash sorting, impacting net interest margins. However, its asset management business thrived, with revenues up 5% and client assets at $9.92 trillion.

Over the past four years, SCHW stock returns have been volatile, ranging from 60% in 2021 to -16% in 2023. The Trefis High Quality (HQ) Portfolio, with 30 stocks, outperformed the S&P 500 annually. While Schwab’s asset management business could benefit from higher investor engagement, uncertainty about future rate cuts may impact the stock. Our forecast values Charles Schwab at $78 per share, slightly above the current market price of $75.



Read more at Nasdaq: Why Charles Schwab Stock Underperformed In 2024