Shares of Charles Schwab (NYSE:SCHW) rose 6.8% as of 3:15 PM ET on Thursday after the financial services company reported better-than-expected growth in total client assets last month.
Schwab’s client assets return to growth
In a press release this morning, Charles Schwab announced that its total client assets were up 12% year-over-year as of the end of November 2023, and 7% sequentially (from $7.65 billion in October) to $8.18 trillion. Meanwhile, Charles Schwab’s net new assets grew by $21.7 billion last month. Transactional funds (or cash from accounts that automatically transfer money to higher-interest accounts at the end of each business day) also grew by $5 billion sequentially to $402.9 billion – the biggest increase since March 2022.
This shift is especially encouraging for Charles Schwab, as the company has seen total client assets decline consecutively for the past four consecutive months since its peak of $8.24 billion in July.
What’s next for Charles Schwab stock?
Yet Charles Schwab also told investors to expect full-year 2023 revenues to decline 9.5% to 10% from 2022, due to a combination of lower transaction cash levels, lower trading volumes and “moderate securities lending.” . That outlook was technically below analyst consensus estimates, which call for 2023 revenue to decline by a more modest 8.4%.
However, if the tide is really turning in Charles Schwab’s favor — and shares of the major financial stocks are still down 15% this year even after today’s pop — it’s easy to see why investors are willing to overlook the disappointing short-term results. guidance today.
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Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Charles Schwab and recommends the following options: Short December 2023 puts $52.50 on Charles Schwab. The Motley Fool has a disclosure policy.
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