Charles Schwab Stock Is Falling Friday: What’s Going On?

Charles Schwab Corp. (NYSE:SCHW) drew mixed reactions from Wall Street analysts, who revised their price forecasts following the company’s third-quarter results on Thursday.

Adjusted earnings of $1.69 per share beat the analyst consensus estimate of $1.66. Revenue rose 17% year over year to a record $7.17 billion, narrowly missing the consensus estimate of $7.19 billion.

Citizens Sees Long-Term Strength Despite Margin Pressure

Citizens analyst Devin Ryan reiterated a Market Outperform rating and maintained a $120 price forecast.

Ryan said Schwab’s record asset growth, improving revenue mix and expense discipline outweigh concerns about slower near-term margin recovery.

The analyst attributed the stock’s initial 3% decline on Thursday to a weaker margin outlook. Strong loan demand and clients moving cash into investments forced Schwab to rely more heavily on expensive wholesale funding.

Investors were also disappointed by the company’s $500 million share repurchase, compared with expectations of roughly $1.4 billion.

However, Ryan viewed the smaller buyback as a decision to support client growth rather than a sign of weakening capital returns.

Despite the funding pressure, Ryan raised his 2027 adjusted earnings forecast by 5% to $7.65 per share.

He also highlighted artificial intelligence as a potential growth driver. Clients using AI-powered trading tools have doubled over six months, supporting higher trading activity and engagement.

JPMorgan Cuts Price Forecast As Funding Costs Rise

JPMorgan analyst Kenneth Worthington maintained an Overweight rating but lowered his price forecast to $147 from $150.

Worthington praised Schwab’s ability to attract assets and expand revenue opportunities through lending, margin services and pledged asset lines.

However, he flagged declining deposits and rising short-term borrowing costs as near-term risks.

Schwab’s deposits fell to $244.1 billion, marking the third consecutive quarterly decline.

Worthington expects funding pressure to ease as deposit growth catches up with loan growth, potentially boosting margins and earnings in 2027.

Still, he lowered his 2027 adjusted earnings forecast to $7.71 per share from $7.97 and cut his 2028 estimate to $9.18 from $9.28.

The analyst also sees AI improving client engagement and operating efficiency, although its financial benefits remain difficult to quantify.

SCHW Price Action: Charles Schwab shares were down 2.45% at $91.85 at the time of publication on Friday, according to Benzinga Pro data.

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