What changed
$SCHW — Discount brokerage and wealth management services.
🎯 Q1 FY26 | Rev $6B | EPS $1.43 vs $1.40 🟢
💡 Consensus expects Schwab to be a slow-growth asset gatherer with margin pressure from high interest costs. The Q1 results show accelerating organic growth (record net new assets, 16% revenue growth) and operating leverage (EPS up 38% YoY, net margin 39%).
🏢 Business Quality: 8/10 | Valuation: fair
📉 Reward/Risk: Upside 25% to $110 (18x FY26 EPS of $6.15) vs downside 15% to $75 (12x FY26 EPS). Ratio 1.7:1.
🔮 Catalyst: Q2 2026 earnings (late July): watch for net new assets >$100B and EPS beat vs $1.57 consensus. Failure signal: net new assets <$80B or EPS miss due to higher interest expense.
💰 Entry: Current price $87.70 is attractive. Ideal entry $80-85, but given the momentum, waiting risks missing the move. Initiate half now, add on pullback.
Also in play: $IBKR $ETFC $AMTD $SCHW $JEF $FIS