SCHW - Charles Schwab: Riding The Wave Of Interest Rates - Cautious Buy (Technical Analysis)

2024-06-11 10:14:34 ET

Summary

• Charles Schwab reports positive earnings, exceeding analyst expectations, indicating a potential turnaround and future growth.
• Schwab's well-defined corporate strategy, including low-cost leadership, educational resources, and strong brand reputation, positions it well for continued growth and market share gains.
• Initiating coverage with a cautious buy based on Schwab's healthy financials, potential benefit from lower interest rates. However, near-term volatility is possible due to Fed meetings and earnings report.
• My analysis specializes in identifying companies that are experiencing growth at a reasonable price and value companies. Rating systems don't consider time horizons, risk profiles, or investment strategies. My articles aim to inform, not to make decisions.

Investment Thesis

Charles Schwab ( SCHW ) recently reported positive first-quarter earnings , exceeding analyst expectations. This continues a trend of the company surpassing estimates for the past two quarters. The company’s net income came in at $1.4 billion or $0.68 per diluted share, on revenue of $4.7 billion. While revenue was down YoY, it showed a positive sequential increase - the first since late 2022. This indicates a potential turnaround and future growth....

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