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Schwab (SCHW) Offers Q1 View, February Core New Assets Rise
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Charles Schwab (SCHW - Free Report) has provided guidance for the first quarter of 2023. The company anticipates revenues to grow 10% year over year. The adjusted pre-tax profit margin is expected in the 45-47% range while the GAAP pre-tax profit margin is expected to be 41-43%.
SCHW also released its monthly activity report for February 2023. Core net new assets were $41.7 billion in the reported month, up 16% sequentially and 3% year over year.
Total client assets were $7.38 trillion, down 1% from January 2023 and down 4% from February 2022. Client assets receiving ongoing advisory services were $3.81 trillion, down 2% from the prior month as well as year over year.
Schwab’s average interest-earning assets of $503.1 billion in the reported month declined 2% from January 2023 and 20% year over year. Average margin balances were $60.6 billion, increasing 1% from the previous month but declining 28% from the prior-year month. Average bank deposit account balances totaled $115.8 billion, down 5% sequentially and 25% from February 2022.
Schwab opened 320,000 new brokerage accounts in February 2023, down 7% sequentially and 10% from the year-earlier month.
Schwab’s active brokerage accounts totaled 34 million at the end of February 2023, which increased marginally on a sequential basis and 2% from the year-ago month. Clients’ banking accounts were 1.7 million, up marginally on a sequential basis and 6% from February 2022. The number of corporate retirement plan participants was up 1% from the prior-month level and 7% year over year to 2.4 million.
Schwab’s inorganic growth efforts have reinforced its position as a leading brokerage player and are expected to be accretive to earnings. By offering commission-free trading, the company has witnessed a rise in client assets and brokerage accounts, which has improved its market share.
Over the past six months, shares of Schwab have lost 28.5% compared with the industry’s decline of 4.4%.
Image Source: Zacks Investment Research
Currently, Schwab carries a Zacks Rank #5 (Strong Sell).
Competitive Landscape
Interactive Brokers Group, Inc. (IBKR - Free Report) released the Electronic Brokerage segment’s performance metrics for February 2023. The segment, which deals with the clearance and settlement of trades for individual and institutional clients globally, reported a rise in client Daily Average Revenue Trades (DARTs) on a sequential basis. On a year-over-year basis, client DARTs declined.
IBKR’s total client DARTs for the month were 2,121,000, up 7% from the January 2023 level but down 13% year over year.
LPL Financial Holdings Inc. (LPLA - Free Report) is expected to release monthly metrics data in a few days.
Image: Bigstock
Schwab (SCHW) Offers Q1 View, February Core New Assets Rise
Charles Schwab (SCHW - Free Report) has provided guidance for the first quarter of 2023. The company anticipates revenues to grow 10% year over year. The adjusted pre-tax profit margin is expected in the 45-47% range while the GAAP pre-tax profit margin is expected to be 41-43%.
SCHW also released its monthly activity report for February 2023. Core net new assets were $41.7 billion in the reported month, up 16% sequentially and 3% year over year.
Total client assets were $7.38 trillion, down 1% from January 2023 and down 4% from February 2022. Client assets receiving ongoing advisory services were $3.81 trillion, down 2% from the prior month as well as year over year.
Schwab’s average interest-earning assets of $503.1 billion in the reported month declined 2% from January 2023 and 20% year over year. Average margin balances were $60.6 billion, increasing 1% from the previous month but declining 28% from the prior-year month. Average bank deposit account balances totaled $115.8 billion, down 5% sequentially and 25% from February 2022.
Schwab opened 320,000 new brokerage accounts in February 2023, down 7% sequentially and 10% from the year-earlier month.
Schwab’s active brokerage accounts totaled 34 million at the end of February 2023, which increased marginally on a sequential basis and 2% from the year-ago month. Clients’ banking accounts were 1.7 million, up marginally on a sequential basis and 6% from February 2022. The number of corporate retirement plan participants was up 1% from the prior-month level and 7% year over year to 2.4 million.
Schwab’s inorganic growth efforts have reinforced its position as a leading brokerage player and are expected to be accretive to earnings. By offering commission-free trading, the company has witnessed a rise in client assets and brokerage accounts, which has improved its market share.
Over the past six months, shares of Schwab have lost 28.5% compared with the industry’s decline of 4.4%.
Image Source: Zacks Investment Research
Currently, Schwab carries a Zacks Rank #5 (Strong Sell).
Competitive Landscape
Interactive Brokers Group, Inc. (IBKR - Free Report) released the Electronic Brokerage segment’s performance metrics for February 2023. The segment, which deals with the clearance and settlement of trades for individual and institutional clients globally, reported a rise in client Daily Average Revenue Trades (DARTs) on a sequential basis. On a year-over-year basis, client DARTs declined.
IBKR’s total client DARTs for the month were 2,121,000, up 7% from the January 2023 level but down 13% year over year.
LPL Financial Holdings Inc. (LPLA - Free Report) is expected to release monthly metrics data in a few days.
Currently, IBKR and LPLA carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.