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 (TSX: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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