Bernstein Research Maintains Charles Schwab Corporation (SCHW) Market Perform Rating

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."