The Charles Schwab Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Investors in The Charles Schwab Corporation (NYSE:SCHW) had a good week, as its shares rose 2.4% to close at US$94.14 following the release of its quarterly results. Charles Schwab reported US$6.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.26 beat expectations, being 5.9% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Charles Schwab's 16 analysts is for revenues of US$26.1b in 2026. This would reflect a decent 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 26% to US$5.38. Before this earnings report, the analysts had been forecasting revenues of US$25.7b and earnings per share (EPS) of US$5.19 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for Charles Schwab

The consensus price target was unchanged at US$112, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Charles Schwab analyst has a price target of US$134 per share, while the most pessimistic values it at US$88.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Charles Schwab shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Charles Schwab's growth to accelerate, with the forecast 11% annualised growth to the end of 2026 ranking favourably alongside historical growth of 8.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Charles Schwab to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Charles Schwab's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Charles Schwab going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Charles Schwab you should know about.

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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.