Bull of the Day: Charles Schwab (SCHW)

The Charles Schwab Corp. (SCHW) reported record second-quarter 2025 results, exceeding analyst expectations for the tenth consecutive quarter with net revenue up 25% to $5.9 billion and EPS of $1.14. The firm saw record total client assets of $10.76 trillion and strong core net new asset growth, leading to bullish analyst revisions for 2025 and 2026 earnings. Concurrently, Schwab's board authorized a new $20 billion share repurchase program, replacing a prior authorization, as its shares reached new all-time highs year-to-date, reflecting robust operational performance and attractive valuation metrics.

Analysis

The Charles Schwab Corporation (SCHW) demonstrated significant operational strength and financial momentum in its second-quarter 2025 results. The firm reported record net revenue of $5.9 billion, a 25% year-over-year increase, and record earnings per share of $1.14, surpassing consensus estimates for the tenth consecutive quarter. This performance is underpinned by robust growth across key business metrics, including a 31% rise in core net new assets to $80.3 billion, an 11% increase in new brokerage accounts, and a 38% surge in daily average trading volume. The market's positive reception is reflected in the stock's 31.5% year-to-date gain and recent all-time highs. Analyst sentiment is strongly bullish, with nine upward earnings revisions for both 2025 and 2026, projecting substantial EPS growth of 40.3% and 17.4%, respectively. This outlook is further supported by a new, upsized $20 billion share repurchase authorization, signaling strong management confidence. Despite the stock's run-up, valuation appears reasonable, with a forward P/E of 21.2 in line with the S&P 500 and a PEG ratio of 0.94, suggesting the price may not fully reflect its potent growth profile.

Key Decisions for Investors

• Given the combination of strong Q2 performance, double-digit earnings growth forecasts for 2025-2026, and a favorable PEG ratio of 0.94, the stock presents a compelling growth-at-a-reasonable-price (GARP) case for consideration.
• The newly authorized $20 billion share repurchase program represents a significant capital return catalyst and a strong signal of management's confidence, which should provide support for the share price.
• While the stock's recent break to all-time highs reflects powerful positive momentum, investors should be mindful that it is already up 31.5% year-to-date and should assess their entry points accordingly.