Charles Schwab Stock Surges Pre-Market On Significant Jump In Net Income: Retail’s Unconvinced

Shares of Charles Schwab Corporation (SCHW) surged over 5% in Tuesday’s pre-market session after the firm reported upbeat fourth-quarter results driven by record net inflows into the company’s Managed Investing Solutions.

Schwab reported a 20% year-over-year (YoY) rise in its fourth-quarter (Q4) revenue to $5.33 billion compared to a Wall Street estimate of $5.12 billion. Earnings per share (EPS) stood at $1.01 versus an estimated $0.88. Adjusted net income surged 44% to $1.97 billion.

CEO Rick Wurster noted that strong client engagement, increased margin utilization, encouraging client cash trends, and record net inflows into Managed Investing Solutions helped lift the fourth-quarter revenue.

The firm added $115 billion in core net new assets during the quarter, taking its asset gathering for the year to $367 billion. Total client assets increased 19% YoY to $10.10 trillion.

Schwab said new brokerage account openings rose 23% YoY to 1.1 million for the quarter, pushing total active accounts to 36.5 million. Trading activity rose 11% compared to the previous quarter as client engagement surged following the election.

On Stocktwits, retail sentiment continued to trend in the ‘neutral’ territory (45/100). The move was accompanied by ‘extremely high’ message volumes.

Analysts have highlighted mixed opinions on the stock lately.

According to TheFly, Citi lowered the firm's price target on Charles Schwab to $80 from $85 while keeping a ‘Neutral’ rating on the shares. The brokerage also opened a "90-day downside catalyst watch" on the shares.

However, Deutsche Bank raised the firm's price target on the stock to $98 from $84 while keeping a ‘Buy’ rating on the shares as part of a 2025 outlook for the brokers, asset managers, and exchanges sector.

SCHW shares have gained over 3% since the beginning of the year and have risen over 20% in the past year.

Also See: 3M Stock Surges Pre-Market On Upbeat Q4: Retail Sentiment Flips Into Bullish Territory

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