Overview

• U.S. financial services firm's Q2 revenue rose 21% yr/yr, beating analyst expectations

• Adjusted EPS for Q2 rose 42% yr/yr, beating analyst expectations

• Company repurchased $1.0 bln in shares during the quarter

Outlook

• Company did not provide specific guidance for future quarters or the full year in its press release

Result Drivers

• CLIENT ASSET GROWTH - Schwab said record core net new assets and total client asset growth drove results, with $119.8 bln in core net new assets, up 49% yr/yr

• CLIENT ENGAGEMENT - Record trading activity, increased use of managed investing solutions, and higher margin loan balances contributed to revenue growth, according to CEO Rick Wurster

• DIVERSIFIED REVENUE - Growth in net interest revenue, asset management fees, and trading revenue supported overall revenue increase, per CFO Mike Verdeschi

Company press release: ID:nBw5PMrYYa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Revenue	Beat	$7.07 bln	$6.89 bln (13 Analysts)
Q2 Adjusted EPS	Beat	$1.62	$1.55 (17 Analysts)
Q2 EPS		$1.54
Q2 Net Income		$2.80 bln
Q2 Net Interest Margin		3.00%

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 18 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the investment banking & brokerage services peer group is "buy"

• Wall Street's median 12-month price target for Charles Schwab Corp is $121.00, about 18% above its July 20 closing price of $102.54

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 15 three months ago

Reuters Recommended Reads

• July 21 - Synchrony Q2 net interest income rises on lower liability costs, higher loan yields

• July 21 - KeyCorp Q2 net interest income rises on lower deposit costs

• July 21 - MSCI Q2 revenue slightly beats; FY operating expense outlook lifted

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