: : Charles Schwab upgraded to buy from neutral, but price target cut to at Citigroup #FinanceUSA #StockMarketNEWS Charles Schwab Corp. SCHW was lifted to buy from neutral on Monday by Citigroup

: Charles Schwab upgraded to buy from neutral, but price target cut to at Citigroup #FinanceUSA #StockMarketNEWS
Charles Schwab Corp. SCHW was lifted to buy from neutral on Monday by Citigroup analysts, who see a a “compelling entry point” from a 23% drop over two days. Shares of the financial services company, down 7% in premarket trading, have been hit by fallout from the failure of Silicon Valley Bank. “We see near-term revenue/earnings headwinds from rising funding costs and continued client cash sorting, but we believe these are reflected in the current stock price. While client cash sorting is a pressure point and we expect to see the magnitude at a higher level than prior cycles, we do not see a material risk to deposits leaving SCHW given the composition of its deposit base and customer protections (0K in insurance given 3 bank charters),” said Citi analysts Christopher Allen and Alessandro Balbo. They noted that Schwab pointed to 0-0 billion in funding capacity from supplemental liquidity sources — retail CD’s, Federal Home Loan Banks advances and wholesale funding/repos. It had borrowed .1 billion from external debt facilities and .05 billion from retail brokered CD’s by end 2022, while from year-end through Feb., it borrowed an extra .4 billion from external debt facilities and .4 billion in additional brokered CD’s. The company assured that these moves were temporary, said Citi. The analysts cut their price target to per share from , still a multiple of 14 times their 2024 earnings per share. Citi analysts said they still prefer brokers with lower levels of client cash/sorting deposit risk, such as Interactive Brokers Group
and LPL Financial Holdings
.

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