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SCHW enters its Q3 earnings print on October 15 having shed 10.5% over the past month to $95.94, with a busy week of analyst revisions pulling targets in opposite directions and the options market turning notably calmer than it has been all year.
The Street is not aligned on where Schwab goes from here. Truist cut its target to $125 from $130 on October 13, keeping a Buy rating, while Morgan Stanley moved the other way on October 9, raising to $141 from $136 and holding Overweight. Evercore ISI initiated coverage at In-Line with a $107 target on October 12, essentially putting a ceiling close to where the stock already trades. UBS and Barclays both trimmed last week, to $113 and $118 respectively. B of A, carrying an Underperform, nudged its target to $95, a level the stock is now sitting right on top of. The consensus mean of $122 implies meaningful upside from current levels, but the recent direction of travel is more cautious than bullish. The PE multiple has compressed roughly 13% over 30 days to 12.6x, and the price-to-book has fallen to 3.1x. Bulls argue that management's FY26 revenue growth guide of 14% to 15%, with net interest margin expected to exit the year at 3.25% to 3.30%, underpins a multi-year earnings recovery. Bears counter that organic asset growth is slowing, deposit betas remain elevated under competitive pressure, and the cash optimiser thesis management keeps dismissing may quietly limit margin upside anyway. EPS estimate momentum is one of the brighter spots: the 30-day and 90-day EPS revision scores rank in the 86th and 84th percentiles respectively.
Options positioning is leaning toward calls rather than puts, which is the less defensive setup than Schwab has seen recently. The put/call ratio is at 0.88, below its 20-day average of 0.92 and nearly one standard deviation below that average, meaning demand for downside protection has actually eased heading into the print. The 52-week high on the PCR was 1.46, so the current reading is far from that extreme. Short interest, at just 1.1% of the free float, is not a meaningful part of the story. It has edged up about 24% over the past month from a low base, but borrow costs are minimal at 0.37% and availability is effectively unlimited, giving no squeeze dynamic whatsoever. Positioning, taken together, looks more sanguine than the price action alone would suggest.
The FDIC call report data tracked by ORTEX Alt Data adds some factual texture from the bank side of the business. Net income at Schwab's insured bank charters has risen for seven consecutive quarters, reaching $1.01bn in the quarter to end-April, and net loans and leases have grown for nine consecutive quarters. The FDIC dataset has not yet been tested as a leading indicator against Schwab's reported figures, so it cannot be read as a forecast of tomorrow's print. What it does confirm is that the bank's own financials have been consistently improving heading into the period that Q3 results will cover.
Co-Chairman Walter Bettinger sold $8.25m of stock on August 28 in a transaction not filed under a pre-arranged 10b5-1 plan, the most significant discretionary insider transaction in the past 90 days. The overall 90-day insider net is negative at roughly $112m in value terms, though most of that reflects option exercises matched with immediate sales rather than pure open-market selling. On the institutional side, BlackRock added 2.5m shares in the quarter to September 30, bringing its stake to 7.8%. FMR added 4.7m shares over the same period. Putnam added 5.7m shares as of end-August. The buying among large passive and active managers sits in contrast to the insider activity and to the stock's recent underperformance.
The prior-quarter print in July produced a modest one-day decline of 1.7%, followed by a five-day recovery of 3.3%. Tomorrow's release carries similar setup dynamics: the stock has already re-rated lower ahead of the number, analyst targets are split across a wide range from $95 to $141, and the options market is not pricing unusual fear. What matters most in the print is whether net interest margin commentary confirms or challenges the 3.25% to 3.30% exit-rate guide, and whether client asset growth holds up against the slowing pace that bears have flagged.
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