Bernstein Research Maintains Charles Schwab Corporation (SCHW) Market Perform Rating
March 15, 2010 9:24 AM
Bernstein Research analysts Brad Hintz, Vincent M. Curotto and Luke Montgomery maintained their Market Perform rating for shares of Charles Schwab Corporation (NYSE: SCHW), with a target price of $16.
Although the analysts had a favorable view of long-term prospects for Charles Schwab Corporation, they wrote that the stock was currently fully valued.
They said that as long as the Fed's short-term interests remain near zero, Charles Schwab Corporation's interest income will remain under pressure.
The analysts wrote that, "SCHW is currently trading at 23.6x consensus next-twelve-month EPS estimates, or within its 8th valuation decile and above the long- term average of 21.7x. Investors continue to favor SCHW as a rate cycle play – an increase in rates will lift money market fee waivers and asset yields will improve. That said, despite a tailwind from rates, investors should also consider that the operating environment will likely remain lackluster in 2010 as client engagement will wane amidst a less volatile and flat equity market and the uninspiring pace of macroeconomic improvement. We continue to rate the stock Market Perform."
