Morgan Stanley reiterated its bullish stance on Charles Schwab after the company reported second-quarter adjusted earnings of $1.62 per share on record revenue of $7.07 billion, beating Wall Street estimates. The firm raised its full-year revenue growth outlook to between 17.5% and 18.5%, up from the prior 14% to 15% range, driven by stronger client engagement and transaction activity rather than improved net interest margin assumptions, which remain at 3.00% to 3.10%. Daily average trades hit a record 11.9 million, a 57% jump from a year earlier, while trading revenue climbed 28% to about $1.2 billion and bank loan balances reached $67 billion, up 33%. Morgan Stanley highlighted Schwab's shift toward high-margin client lending, with pledged asset line balances surging 59% to $33.4 billion, and noted new growth drivers including prediction markets, crypto spot trading, and AI tools. The analyst set a $133 price target based on a 16 times multiple of estimated 2027 earnings per share of $8.32, implying roughly 30% upside from the pre-earnings level near $102.54.
Charles Schwab CorpSchwab beat Q2 earnings estimates, raised revenue growth outlook, and Morgan Stanley set $133 price target
Morgan StanleyMorgan Stanley reiterated bullish stance and set $133 price target on Schwab, implying 30% upside
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