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Charles Schwab Growing Faster Than Its Peers As It Gains Market Share

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Charles Schwab Corp (NYSE: SCHW) reported Q3 EPS ahead of expectations. The company’s growth continues to be higher than peers, backed by market share gains and product innovation, Argus’ Stephen Biggar said in a report. He maintained a Buy rating on Charles Schwab, while raising the price target from $34 to $36.

Charles Schwab posted Q3 EPS at $0.35, beating the consensus estimate by $0.02. The company’s brokerage accounts grew 4 percent y/y and crossed 10 million for the first time during the quarter. Client assets grew 13 percent to $2.73 trillion.

Growing Faster Than Peers

Analyst Biggar expects Charles Schwab to generate above-peer-average growth on the back of its innovative products and continued market share gains.

“The company has challenged industry pricing standards with many low- or no-cost offerings, including its popular ETFs. It has also seen rapid growth in its ETF-based Intelligent Portfolios, with a 30% increase in assets in 2015,” Biggar wrote.

The analyst pointed out that Charles Schwab had been able to grow its core net assets by more than $100 billion in each of the last four years, and appears to be on track to do the same in 2016 as well. The company continues to attract cost-conscious clients from other financial services providers.

“Given the substantial overcapacity in the financial services industry, management expects market share gains to be a primary growth driver and believes that the ability to build relationships and offer quality advice will be key determinants of success,” Biggar added.

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Latest Ratings for SCHW

DateFirmActionFromTo
Mar 2017UBSAssumesBuy
Dec 2016SunTrust Robinson HumphreyUpgradesHoldBuy
Dec 2016Keefe Bruyette & WoodsInitiates Coverage OnOutperform

View More Analyst Ratings for SCHW
View the Latest Analyst Ratings

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