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Charles Schwab earnings, Instacart coverage: Trending tickers

Charles Schwab (SCHW) shares are trading higher as the company's third-quarter earnings beat estimates. The company also saw a slowing in bank deposit outflows, but still beat expectations.

Instacart (CART) shares are lower as Wall Street initiates bullish coverage on the stock, including JPMorgan Chase and Goldman Sachs.

Yahoo Finance's Julie Hyman and Josh Lipton take a look at some of the trending tickers of the day. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- Let's talk about Charles Schwab, or Chuck Schwab as you like to call it. Their shares are in the green today. They've been helping lead the S&P 500 higher that's after the brokerage giant reported earnings this morning. And it comes as the firm saying bank deposit outflows were slowing down 7% from the previous quarter, down more than that year over year down 28% year over year, but still, that deposit drop was smaller than had been anticipated by analysts.

And one of the other interesting things here is we've been seeing something happen at some of the banks, which Charles Schwab talked about something they call cash sorting, which is people taking money from their cash deposits and putting it in higher-yielding stuff like money markets. That's good for the people. It's not as good for Charles Schwab. And it says some of that activity is starting to slow down.

- Yeah, so this was an expectations game story. So earning's beat, as you noted. Bank deposits did drop but still beat with the Street was looking for. Citi saying telling their clients results in September trends were a touch better than expected. They noted the recent negative sentiment in their words, and that is true. This has been a rough year for Charles Schwab. You remember back early in the year, the regional banking crisis, the stock got absolutely walloped and is still down hard year to date.

- Yeah, it's down, and the deposits are still down. Net interest revenue, which we talked a lot about at the other banks that we heard from on Friday being positive, was down 24% year over year.

- But a pop today for Chuck, so.

- Yeah.

- Moving on, JP Morgan and Goldman Sachs have kicked off coverage on Instacart today with a bullish view, and the stock is down about 1.2% here. Around half of the company's IPO underwriters have initiated coverage with their top ratings that's despite the stock flatlining following its IPO debut. So Instacart always interesting, Julie, because it makes its debut. Well known brand. We all know it. Some of us even gave it a shot during the pandemic but had a decent bottom line, which we didn't always see.

The other side of the coin, though, growth had slowed, and the company said, well, that's macro. That's inflation. That's a tough comp. But I do remember at least some investors at the time saying that's also competition, and you've got a ton of it. But it is notable today. We did have some analysts weighing in, and they were generally positive.

- And it's also notable that the stock is down even though they're generally positive, right?

- Correct.

- Remember the IPO price was $30? The average price target of those who have initiated on the stock is now $34.14. There are a total of nine buys, seven holds, and one sell on Instacart of the various firms that have initiated coverage here. Some of them are more positive because the company has newer advertising business that they say is going to help matters.

But again, you have a disconnect between what's happening with the actual stock and what the Street is saying, so we'll see if that gap closes at some point.

- A lot of it has to do with the advertising business, which is interesting when you read through the notes. Analysts knowing this is the profitability driver of the company. Baird's saying it's one of the most successful rollouts of retail media, perhaps only second to Amazon. So very positive note. Not a very positive reaction, though, today.

- Definitely not.