A price target chop was the news item dinging Charles Schwab (NYSE: SCHW) stock on Friday. It wasn’t the first such move over the past few business days, and that collective bearishness worsened investor sentiment. The storied brokerage’s shares fell by nearly 3% that trading session as a result.
Well before market open that day, Michael Cyprys from ever-influential investment bank Morgan Stanley reduced his fair value assessment on Schwab’s equity. To him, it’s now worth $135 per share, down some distance from his previous level of $148. Despite the slice, Cyprys remains bullish on the company, as he maintained his overweight (i.e., buy) recommendation.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
The analyst’s move was based on his company’s relatively tepid expectation for the brokerage and securities exchange operator segments of the broader financial sector, according to reports.
Morgan Stanley’s institutional view of those segments is that they will collectivvely experience only modest improvements in profitability, to the point where its estimates for them average 4% to 5% below consensus for both 2026 and 2027.
So I’d glean from this that Morgan Stanley is expecting thinner trading and reduced client activity in other areas to affect profitability.
Personally, I’m more positive, as there’s still plenty of capital sloshing around the securities markets and investor sentiment remains bullish, if somewhat cautious. Unless there’s a serious global economic slowdown stemming from the Iran war, I think the markets will remain frothy. I’d put Schwab stock firmly in the buy category.
Before you buy stock in Charles Schwab, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Charles Schwab wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $550,348!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,127,467!*
Now, it’s worth noting Stock Advisor’s total average return is 959% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.