Is Schwab's $20 Billion Buyback Plan Reshaping the Investment Case for SCHW?

• On July 24, 2025, Charles Schwab's board authorized a new share repurchase plan of up to US$20 billion and declared regular quarterly dividends on both common and preferred shares, following strong earnings reported for the second quarter.
• This sequence of shareholder-friendly announcements came shortly after Schwab disclosed an increase in net income and earnings per share for both the quarter and year-to-date periods.
• We will now assess how the newly authorized US$20 billion buyback shapes the company's investment outlook and growth narrative.

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Charles Schwab Investment Narrative Recap

To be a Charles Schwab shareholder, one should expect the company to convert its expanded client base, particularly those gained from Ameritrade, into higher revenue and profit through operational efficiency and product adoption. The newly announced US$20 billion buyback underscores management's confidence, but it does not fundamentally change the immediate importance of retaining and monetizing transitioning Ameritrade clients or lessen the key risk of integration stumbles, both of which remain critical watchpoints in the short term.

Among the latest announcements, the approval of the massive buyback program stands out, reflecting Schwab’s prioritization of capital returns to shareholders following a strong rebound in quarterly earnings. While this move rewards existing shareholders, its ultimate impact still hinges on the ongoing success of Schwab's integration efforts and continued asset inflows, which serve as the primary catalyst for future growth.

On the other hand, investors should pay close attention to the pace and completeness of Ameritrade client integration, as...

Read the full narrative on Charles Schwab (it's free!)

Charles Schwab's outlook anticipates $30.1 billion in revenue and $10.9 billion in earnings by 2028. This projection implies an annual revenue growth rate of 11.7% and an increase in earnings of $4.1 billion from the current $6.8 billion.

Uncover how Charles Schwab's forecasts yield a $106.17 fair value, a 10% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community’s nine fair value estimates for Schwab shares range from US$60.32 to US$106.17. While opinions on valuation vary widely, the successful transition of Ameritrade clients remains a central issue with broad implications for the company’s growth outlook.

Explore 9 other fair value estimates on Charles Schwab - why the stock might be worth 37% less than the current price!

Build Your Own Charles Schwab Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Charles Schwab research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Charles Schwab research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Charles Schwab's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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