Charles Schwab Corporation ( NYSE: SCHW ) has taken a significant hit to its stock price this year, but JPMorgan Chase is convinced a full recovery is on the cards.
Charles Schwab stock has 50% upside from here
The investment bank sees Schwab as well-positioned to benefit from higher rates. On Wednesday, it reiterated the stock at “overweight” with a price target of $97 that represents a 50% upside from here.
Investors are starting to go to cash. While Schwab will suffer from lower asset management revenue and lower margin balances, we see potential for cash sorting to be delayed, and deposit balances to rise allowing it to better take advantage of rising rates.
JPMorgan remains positive on the financial services company even after it reported SCHW)%20Misses%20Q1%20Earnings%20and%20Revenue%20Estimates,-Zacks%20Equity%20Research&text=The%20Charles%20Schwab%20Corporation%20(SCHW)%20came%20out%20with%20quarterly%20earnings,per%20share%20a%20year%20ago." rel="noreferrer noopener" target="_blank"> weaker-than-expected results for its fiscal first quarter in mid-April.
Karen Firestone loads up on Charles Schwab Corp
Karen Firestone also agrees with the bullish call. Explaining why she recently loaded up on the stock that’s now down 30% from its year-to-date high, she said on CNBC’s “Halftime Report”:
What’s more important is their entire asset base on which they’ll get higher interest rates on short-term money that they have out and that’s much more powerful than the negatives on client cash sorting.
The CEO of Aureus Asset Management also finds SCHW “attractive” as it’s trading at only 13 times next year’s earnings – the lowest multiple it’s had in years. Last month, Schwab declared 20 cents of per-share quarterly dividend.
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