UPDATE: Compass Point Initiates Charles Schwab at Neutral on Interest Rate Earnings Pressure

Compass Point initiated coverage on Charles Schwab

with a Neutral rating and a $13.50 price target. Compass Point said, "We expect ongoing macro uncertainty to continue to weigh on interest rates, which in turn, should keep Schwab earnings (and shares) relatively muted over the next 12 months given the company's heavy reliance on net interest income. In addition, although management has done a good job of keeping expenses in check, and capital flexibility appears to be growing, we expect continued equity market volatility to leave organic growth and trading activity subdued. We could become more constructive on the stock if we had greater conviction that interest rates were sustainable at higher levels, meaningful share repurchase activity was approaching, or at a cheaper valuation. But in the meantime, we see limited near-term catalysts and look for shares to remain range-bound." Charles Schwab closed at $12.73 on Thursday.