Charles Schwab revealed plans to retrench 3% of its workforce, as it attempts to boost interest margins amidst macroeconomic headwinds.
The financial services giant is laying off 600 employees, hoping that the move would lower expenses and therefore mitigate pressure from declining interest rates and economic challenges. Impacted positions span all staffing grades, as well as organizations and locations across the company, as indicated by the company’s statement.
Charles Schwab’s banking unit has been experiencing pressure on its profit margins amidst a low-interest-rate environment. The global and domestic macroeconomic headwinds/uncertainties and therefore declining interest rates seem to have aggravated the narrowing of interest margin between loans and deposits for Charles Schwab. Furthermore, the Federal Reserve is expected to implement more rate cuts this year after dropping rates by a quarter of a percentage point over the summer – something that could potentially add to Charles Schwab’s concerns, since a large portion of its revenue comes from net interest.
In its second quarter earnings, Schwab’s net interest revenue declined -4% from the first quarter. In July, the company said that if the Fed rate cuts continued, it expected a further squeeze into the end of the year.
Through the job cuts, the company is hoping to achieve better control of expenses, and improvements on scale and efficiency — like platform improvements and digital experiences - according to the company.
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where SCHW declined for three days, in of 285 cases, the price declined further within the following month. The odds of a continued downward trend are .
The 10-day RSI Indicator for SCHW moved out of overbought territory on April 29, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 39 similar instances where the indicator moved out of overbought territory. In of the 39 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 64 cases where SCHW's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for SCHW turned negative on April 30, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 42 similar instances when the indicator turned negative. In of the 42 cases the stock turned lower in the days that followed. This puts the odds of success at .
SCHW broke above its upper Bollinger Band on April 23, 2024. 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.
The Momentum Indicator moved above the 0 level on April 16, 2024. You may want to consider a long position or call options on SCHW as a result. In of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. 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 297 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 297 cases where SCHW Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. SCHW’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock slightly better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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 (4.156) is normal, around the industry mean (5.433). P/E Ratio (28.492) is within average values for comparable stocks, (35.241). Projected Growth (PEG Ratio) (1.234) is also within normal values, averaging (2.610). Dividend Yield (0.014) settles around the average of (0.030) among similar stocks. P/S Ratio (7.032) is also within normal values, averaging (105.216).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a provider of securities brokerage and other financial services
Industry InvestmentBanksBrokers