Charles Schwab (NYSE:SCHW) Corporation experienced a 3.9% drop in share value on Friday after the company released its November metrics that elicited a variety of responses from industry analysts. The financial services firm announced that core net new assets from new and existing clients reached $28.8 billion, a 17% rise from the previous month. Additionally, Charles Schwab's total client assets increased by 4.6% to $10.31 trillion, with new brokerage accounts growing by 7.9% to 357,000.
The company has revised its full-year net revenue growth forecast to between 3.0% and 3.5%, up from the 2.0% to 3.0% range it predicted during the Fall Business Update in October. This improved outlook is attributed to greater investor engagement, post-election equity market strength, and the stabilization of client transactional sweep cash balances.
Analysts at TD Cowen responded positively to the company's raised revenue guidance for the fiscal year 2024, which suggests a fourth-quarter estimate of approximately $0.90, slightly higher than the consensus estimate. Despite this, TD Cowen noted that asset flows and month-over-month cash accumulation did not meet their expectations.
Citi analysts highlighted robust trading activity and margin balance growth, with an average sequential increase of around 4%. They did, however, point out that net new assets were below projections and anticipate a slower December in trading activity. Nevertheless, Citi expects consensus estimates to face upward pressure based on quarter-to-date trends.
Keefe, Bruyette & Woods observed that cash balances remained fairly consistent with the previous month, and there was a minor uptick in net new assets from October, although this growth did not meet historical standards. The firm hinted at a possible expectation for modest cash growth that did not materialize.
JPMorgan (NYSE:JPM) analysts remarked on the flat month-over-month client transactional sweep, noting that client cash levels were stable. This was seen as an indication of Charles Schwab's continued ability to pay down high-cost short-term borrowing.
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