What Should You Know About The Charles Schwab Corporation's (NYSE:SCHW) Growth?
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On 31 March 2019, The Charles Schwab Corporation (NYSE:SCHW) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 7.5% next year compared with the higher past 5-year average growth rate of 23%. By 2020, we can expect Charles Schwab’s bottom line to reach US$3.6b, a jump from the current trailing-twelve-month of US$3.3b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Charles Schwab in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Charles Schwab
How will Charles Schwab perform in the near future?
The view from 17 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for SCHW, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 5.7% based on the most recent earnings level of US$3.3b to the final forecast of US$4.0b by 2022. EPS reaches $3.25 in the final year of forecast compared to the current $2.47 EPS today. With a current profit margin of 33%, this movement will result in a margin of 34% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Charles Schwab, I've compiled three fundamental factors you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is Charles Schwab worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Charles Schwab is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Charles Schwab? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
