SCHW

Rating neutralTentativeAI Memo

Charles Schwab

As of 2026-04-17/Confidence medium

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Data freshness

AI Memo

As of 2026-04-17 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Report quality notice

peer set is too generic or lacks enough direct operating comparators

Action

neutral

Confidence

medium

Horizon

—

Key catalyst

Q1 2026 results reset the near-term tape • 2026-04-16

Expected move: +9%

Biggest risk

The bear case is that the setup is still mostly a monitoring story: net interest revenue was down sequentially, near-term upside still depends on sustaining better funding mix and client cash behavior, and the deterministic prior in this packet is only neutral with moderate uncertainty and lower evidence quality than the prior baseline.

Invalidation

Break below $82 or thesis failure.

What would change my mind?

The bull case is that Schwab’s 1Q26 release marks a real operating step-up: record revenue, strong account and asset growth, 46% managed-investing net-flow growth, record trading volume, rising sweep balances, and aggressive buybacks together point to a healthier earnings engine than the market credited a few quarters ago [#8-K-2026-04-16].

Research note

Recommendation

neutral

Confidence

medium

As of

2026-04-17

Base target

$95

p=50%

Bull target

$108

p=25%

Bear target

$82

p=25%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Q2 funding and engagement checkpoint
Capital return remains a medium-term support lever
The bull case is that Schwab’s 1Q26 release marks a real operating step-up: record revenue, strong account and asset growth, 46% managed-investing net-flow growth, record trading volume, rising sweep balances, and aggressive buybacks together point to a healthier earnings engine than the market credited a few quarters ago [#8-K-2026-04-16].

BearKey bullets

Capital return is supportive, but if execution slows the per-share tailwind weakens.
High-coverage financials can re-rate quickly on rate-path or macro shifts even when company execution is solid.
Net interest revenue remains sensitive to client cash sorting and funding-mix changes.

WatchKey bullets

Q1 2026 results reset the near-term tape

Summary

High-level snapshot

Recommendation

neutral

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Base case: $95 (p=50%)

Bull/Bear spread: +24% / -6%

Vs latest close: Bull +24% · Base +9% · Bear -6%

Scenario probabilities

Bull Target: $108 (p=25%)Base Target: $95 (p=50%)Bear Target: $82 (p=25%)

Commentary

Sentiment is improved versus the older negative baseline because the April 16, 2026 update delivered a cleaner operating print than a pure monitoring thesis implied, especially on client growth, fee revenue, and capital return [#8-K-2026-04-16]. Even so, the packet’s current deterministic prior is neutral, evidence quality is only moderate, and the stock already reflects much of the immediate earnings release upside. The peer frame is better read through brokerage, wealth, and asset-gathering comparators than generic consumer-finance comps, but the thesis still belongs in a tentative monitoring bucket rather than a standard-conviction call.

As of 2026-04-17 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Q2 funding and engagement checkpoint
Capital return remains a medium-term support lever

Scenarios

Bull Target (Scenario probability)

$108 / p=25% prob

Base Target (Scenario probability)

$95 / p=50% prob

Bear Target (Scenario probability)

$82 / p=25% prob

Price $87 as of 2026-05-29

Nearest Scenario: Bear (∆ 6%)

Targets vs latest close: Bull +24% · Base +9% · Bear -6%

Sentiment & Exposure

Sentiment unavailable: insufficient coverage

Events

Other notable items detected

EVENT2026-04-16
Q1 2026 results reset the near-term tape
Schwab’s April 16, 2026 earnings release showed record 1Q net revenue of $6.5 billion, GAAP EPS of $1.37, net interest margin of 2.88%, client sweep cash balances up $7.8 billion quarter over quarter to $461.5 billion, and $2.4 billion of share repurchases alongside a 19% dividend increase. That combination gives investors fresh evidence on client engagement, funding mix, and capital return, but much of the headline beat is now in the market and the next move depends on whether follow-through data confirms the improvement [#8-K-2026-04-16].
Prob 100.00% • Move 4.00% • Priced-in 75.00%

Short-term Catalysts

Next few weeks

Q2 funding and engagement checkpoint
2026-07-16
The key near-term question is whether Schwab can extend the March-quarter pattern of stronger sweep balances, record trading activity, and fee growth into the June quarter. If the next quarterly update shows continued stabilization in funding mix and another solid client-activity print, investors are more likely to underwrite a firmer earnings base; if net interest revenue stays flat-to-down sequentially, upside can stall [#8-K-2026-04-16].
Prob 80% • Move 6% • Priced-in 45%

Long-term Catalysts

Months to a year

Capital return remains a medium-term support lever
2026-12-31
Schwab reported preliminary consolidated Tier 1 leverage of 8.9%, adjusted Tier 1 leverage of 6.8%, 24.3 million shares repurchased for $2.4 billion in 1Q26, and a 19% dividend increase. If that capital-return cadence continues while client assets and advice flows remain strong, per-share earnings support can persist even without a large valuation multiple expansion [#8-K-2026-04-16].
Prob 70% • Move 12% • Priced-in 40%

Risks

Capital return is supportive, but if execution slows the per-share tailwind weakens.
High-coverage financials can re-rate quickly on rate-path or macro shifts even when company execution is solid.
Net interest revenue remains sensitive to client cash sorting and funding-mix changes.
Sequential slippage in sweep balances or lower trading engagement could cap earnings upside.

Peers

Symbol	Summary
IBKR	Best direct operating comparator available in the packet: a public broker-dealer with similar exposure to trading activity, client cash balances, and platform monetization.
UBS	Useful wealth-management and brokerage comparator for advisor-led asset gathering, deposit behavior, and the earnings impact of funding mix changes, albeit with broader international banking exposure.
BLK	Not a perfect like-for-like peer, but more relevant than consumer-credit names because it helps frame asset-gathering, fee-rate durability, and operating leverage tied to client asset growth.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Human targets: serper
Analysis date: 2026-04-17

AI Stock Memo: SCHW - Charles Schwab - RankAlpha