Charles Schwab (SCHW, $36.03) expects Q3 revenue to be lower than Q2
Charles Schwab provided a third-quarter revenue update that was below investors’ expectations.
The financial services company said sharply lower long-term interest rates propelled faster prepayments on the mortgage-backed securities within its investment portfolio, and that led to the company’s net interest margin getting squeezed. As a result, its third-quarter revenue is "slightly lower" than its second-quarter result, according to the company.
Chief Financial Officer Peter Crawford said that Schwab has "taken steps to mitigate prepayment risk by reshaping our investment portfolio over recent years to include significantly expanded allocations to less-prepayable securities," . But that could not stop the latest quarter’s a in prepayment.
FactSet expects third quarter revenue to increase 2.3% quarter to quarter to $2.51 billion. Schwab’s second-quarter revenue was $2.45 billion.
According to Tickeron's analysis:
SCHW sees its Stochastic Oscillator recovers from oversold territory
On September 15, 2020, the Stochastic Indicator for SCHW moved out of oversold territory and this could be a bullish sign for the stock. Traders may want to buy the stock or buy call options. Tickeron's A.I.dvisor looked at 52 instances where the indicator left the oversold zone. In 37 of the 52 cases the stock moved higher in the following days. This puts the odds of a move higher at over 71%.
Current price $36.03 crossed the resistance line at $35.99 and is trading between $37.89 support and $35.99 resistance lines. Throughout the month of 08/18/20 - 09/18/20, the price experienced a +3% Uptrend. During the week of 09/11/20 - 09/18/20, the stock enjoyed a +2% Uptrend growth.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on September 18, 2020. You may want to consider a long position or call options on SCHW as a result. In 58 of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 67%.
The Moving Average Convergence Divergence (MACD) for SCHW just turned positive on September 18, 2020. Looking at past instances where SCHW's MACD turned positive, the stock continued to rise in 27 of 39 cases over the following month. The odds of a continued upward trend are 69%.
SCHW moved above its 50-day Moving Average on August 18, 2020 date and that indicates a change from a downward trend to an upward trend.
The 10-day Moving Average for SCHW crossed bullishly above the 50-day moving average on August 19, 2020. This indicates that the trend has shifted higher and could be considered a buy signal. In 10 of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 59%.
Following a +0.84% 3-day Advance, the price is estimated to grow further. Considering data from situations where SCHW advanced for three days, in 194 of 312 cases, the price rose further within the following month. The odds of a continued upward trend are 62%.
The Aroon Indicator entered an Uptrend today. In 135 of 239 cases where SCHW Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 56%.
Bearish Trend Analysis
SCHW broke above its upper Bollinger Band on August 28, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 54%. During the last month, the daily ratio of advancing to declining volumes was 1.61 to 1.
The Tickeron SMR rating for this company is 19 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 22 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.82) is normal, around the industry mean (3.26). P/E Ratio (15.11) is within average values for comparable stocks, (21.14). Projected Growth (PEG Ratio) (1.52) is also within normal values, averaging (1.03). Dividend Yield (1.43) settles around the average of (2.25) among similar stocks. P/S Ratio (3.95) is also within normal values, averaging (27.77).
The Tickeron Price Growth Rating for this company is 55 (best 1 - 100 worst), indicating fairly steady price growth. SCHW’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 65 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 74 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SCHW’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock better than average.
SCHW's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for SCHW turned positive on May 11, 2023. Looking at past instances where SCHW's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where SCHW's RSI Indicator exited the oversold zone, of 27 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 16, 2023. You may want to consider a long position or call options on SCHW as a result. In of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
SCHW moved above its 50-day moving average on May 22, 2023 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for SCHW crossed bullishly above the 50-day moving average on May 26, 2023. This indicates that the trend has shifted higher and could be considered a buy signal. In of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SCHW advanced for three days, in of 298 cases, the price rose further within the following month. The odds of a continued upward trend are .
SCHW may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 7 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SCHW declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. SCHW’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.597) is normal, around the industry mean (3.566). P/E Ratio (14.663) is within average values for comparable stocks, (36.150). Projected Growth (PEG Ratio) (1.847) is also within normal values, averaging (2.242). Dividend Yield (0.018) settles around the average of (0.038) among similar stocks. P/S Ratio (4.753) is also within normal values, averaging (105.288).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SCHW’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
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