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SCHW Ups 2026 Outlook, Targets Mid-Teen EPS Growth Through the Cycle
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Key Takeaways
SCHW expects 2026 revenue growth of 14-15% and a net interest margin of 3-3.1%.
SCHW targets high-single to low-double-digit revenue growth and mid-teen EPS growth through the cycle.
SCHW assumes a 3.75% Fed funds rate, 10% equity market gain and 8.7 million daily trades in 2026.
At its May 14, 2026, Investor Day, Charles Schwab (SCHW - Free Report) provided an ambitious multi-year growth plan, which signals the firm’s confidence in achieving stronger earnings growth, supported by client growth, deeper relationships, expense discipline and balance sheet flexibility.
Driven by robust organic growth and platform monetization, revenues are expected to grow in the high-single to low-double-digit range through the cycle. Along with this, management expects to achieve positive operating leverage and EPS growth in the mid-teens rate.
Schwab also updated its 2026 scenario, with key assumptions moving higher versus its Winter Business Update.
SCHW’s Updated Scenario & Near-Term Outlook
The updated 2026 scenario assumes the Fed funds upper bound to end the year at 3.75%, changed from the previously mentioned 3.25%. Likewise, equity markets are expected to rise 10% from the 2025-end levels, changed from the previously mentioned 6.5% increase.
The updated scenario also includes full-year daily average trades reaching 8.7 million, with organic net asset growth of 5%.
Based on these assumptions, Schwab expects 2026 revenue growth of 14-15% on a year-over-year basis, with net interest revenue being the key contributor. Average interest-earning assets are also expected to expand modestly in the year. The net interest margin (NIM) is expected to expand to 3-3.10% in 2026, with fourth-quarter NIM reaching 3.25-3.30%.
Driven by sustained strength in client engagement, second-quarter 2026 revenues are expected to increase 16-17% year over year.
In terms of expenses, Schwab expects adjusted expenses to rise 8.5-9.5% in 2026. In the second quarter of this year, adjusted expenses are anticipated to increase 10.5-11.5%. Management attributed this to higher volume-related costs tied to strong business performance and trading activity, as well as the inclusion of Forge Global Holdings (acquired in March 2026).
Our Take on Schwab
Schwab appears well-positioned to benefit from its scale, diversified business model and expanding client relationships, making the investor day update a reaffirmation of the company’s long-term growth trajectory.
In the past six months, SCHW shares have lost 2.7% against the industry’s 4.5% growth.
A couple of Schwab’s peers worth a look are Morgan Stanley (MS - Free Report) and BGC Group, Inc. (BGC - Free Report) , both carrying a Zacks Rank #2 (Buy) at present.
Current-year earnings estimates for BGC Group have moved marginally lower over the past 30 days. BGC Group shares have gained 31.6% in the past six months.
The Zacks Consensus Estimate for Morgan Stanley’s 2026 earnings has moved 4.1% up over the past 30 days. MS shares have gained 22% in the past six months.
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SCHW Ups 2026 Outlook, Targets Mid-Teen EPS Growth Through the Cycle
Key Takeaways
At its May 14, 2026, Investor Day, Charles Schwab (SCHW - Free Report) provided an ambitious multi-year growth plan, which signals the firm’s confidence in achieving stronger earnings growth, supported by client growth, deeper relationships, expense discipline and balance sheet flexibility.
Driven by robust organic growth and platform monetization, revenues are expected to grow in the high-single to low-double-digit range through the cycle. Along with this, management expects to achieve positive operating leverage and EPS growth in the mid-teens rate.
Schwab also updated its 2026 scenario, with key assumptions moving higher versus its Winter Business Update.
SCHW’s Updated Scenario & Near-Term Outlook
The updated 2026 scenario assumes the Fed funds upper bound to end the year at 3.75%, changed from the previously mentioned 3.25%. Likewise, equity markets are expected to rise 10% from the 2025-end levels, changed from the previously mentioned 6.5% increase.
The updated scenario also includes full-year daily average trades reaching 8.7 million, with organic net asset growth of 5%.
Based on these assumptions, Schwab expects 2026 revenue growth of 14-15% on a year-over-year basis, with net interest revenue being the key contributor. Average interest-earning assets are also expected to expand modestly in the year. The net interest margin (NIM) is expected to expand to 3-3.10% in 2026, with fourth-quarter NIM reaching 3.25-3.30%.
Driven by sustained strength in client engagement, second-quarter 2026 revenues are expected to increase 16-17% year over year.
In terms of expenses, Schwab expects adjusted expenses to rise 8.5-9.5% in 2026. In the second quarter of this year, adjusted expenses are anticipated to increase 10.5-11.5%. Management attributed this to higher volume-related costs tied to strong business performance and trading activity, as well as the inclusion of Forge Global Holdings (acquired in March 2026).
Our Take on Schwab
Schwab appears well-positioned to benefit from its scale, diversified business model and expanding client relationships, making the investor day update a reaffirmation of the company’s long-term growth trajectory.
In the past six months, SCHW shares have lost 2.7% against the industry’s 4.5% growth.
Image Source: Zacks Investment Research
Currently, Schwab carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SCHW’s Peers Worth a Look
A couple of Schwab’s peers worth a look are Morgan Stanley (MS - Free Report) and BGC Group, Inc. (BGC - Free Report) , both carrying a Zacks Rank #2 (Buy) at present.
Current-year earnings estimates for BGC Group have moved marginally lower over the past 30 days. BGC Group shares have gained 31.6% in the past six months.
The Zacks Consensus Estimate for Morgan Stanley’s 2026 earnings has moved 4.1% up over the past 30 days. MS shares have gained 22% in the past six months.