Schwab (SCHW) Strong Despite Lower Guidance: Calyon

Charles Schwab (NASDAQ: SCHW) has lowered its 4Q09 EPS guidance, based on the increasing fee waivers and the slower trading volumes. The advertising costs have also increased. The operating results have weakened with the daily average revenue trades and the net new assets falling below expectations.

Calyon Securities has revised the full year and the quarter estimates to factor in the impact of the high fee waivers and the increased ad spends. The 4Q09 estimate has been lowered from $0.18 to $0.14. the daily average trade revenue at Schwab dipped 10% in November, compared to a 15% dip on both the NASDAQ and NYSE. Calyon expects a strong organic growth from Schwab and has maintained the Outperform rating with a price target of $19.