News Flash: Analysts Just Made A Sizeable Upgrade To Their The Charles Schwab Corporation (NYSE:SCHW) Forecasts

The Charles Schwab Corporation (NYSE:SCHW) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Charles Schwab will make substantially more sales than they'd previously expected.

After the upgrade, the 16 analysts covering Charles Schwab are now predicting revenues of US$12b in 2021. If met, this would reflect a notable 18% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to decline 19% to US$1.77 in the same period. Before this latest update, the analysts had been forecasting revenues of US$10b and earnings per share (EPS) of US$1.73 in 2021. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

View our latest analysis for Charles Schwab

It may not be a surprise to see that the analysts have reconfirmed their price target of US$41.46, implying that the uplift in sales is not expected to greatly contribute to Charles Schwab's valuation in the near term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Charles Schwab, with the most bullish analyst valuing it at US$51.00 and the most bearish at US$35.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Charles Schwab's growth to accelerate, with the forecast 18% growth ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. 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 most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Charles Schwab.

Still, 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 2024, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. 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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