Schwab Targets Cut Across the Board as Stock Extends Its Slide

SCHW is down 14% over the past month to $90.89, and the Street spent most of last week adjusting to that reality by trimming price targets in near-unison after the Q3 print disappointed.

The analyst response to October 15's results was broad and consistent in direction, if not in magnitude. Morgan Stanley, the most recent mover, cut its target to $132 from $141 on October 21 while holding Overweight. JP Morgan pulled its target to $147 from $150, also keeping Overweight. Barclays, UBS, Wells Fargo, Evercore ISI and Truist all lowered as well, with cuts ranging from a few dollars to $13 in Truist's case. BMO dropped to $97 on October 19, which is essentially where the stock trades. The mean consensus target now sits at $117.59, implying roughly 29% upside from current levels, but the direction of travel since the Q3 miss has been uniformly downward. Only TD Cowen held its target at $129 while reiterating Buy. The PE multiple has compressed to 12x, down more than 2 points over 30 days, and price-to-book has fallen to 2.9x over the same period.

The bull case rests on franchise momentum that the headline reaction arguably obscures. Q3 adjusted EPS rose 29% year over year to $1.69, revenue hit a record $7.17 billion, and core net new assets increased 38% to a quarterly record of $190.4 billion. Bank loan growth ran at 35% and managed investing flows were strong. The bear case is structural rather than cyclical: Schwab's earnings are heavily tied to net interest income, and transactional sweep cash fell roughly $12.5 billion sequentially to $429.5 billion while wholesale funding rose. Net interest margin came in at 3.04%, soft enough to prompt concern that the monetisation story is slower than the asset-gathering numbers suggest. EPS momentum scores rank in the 73rd to 74th percentile on a 30 and 90-day basis, pointing to positive near-term estimate revisions, but the 12-month forward earnings growth score sits only in the 34th percentile across the market.

Short positioning is not the story here. Short interest is just 1.1% of the free float, up about 2.5% over the week in share terms but still minimal in absolute terms. Cost to borrow is 0.37%, barely changed, and borrow availability is effectively unlimited with over 1.7 billion shares available. The ORTEX short score of 29.9 has been almost perfectly flat for two weeks. None of this reads as a conviction short. Options positioning has also normalised after the post-Q3 call-demand pickup noted in the prior preview note: the put/call ratio is back to 0.91, slightly below its 20-day average of 0.93 and well within the year's range of 0.74 to 1.46. The lending market and options market together suggest no crowd on either side.

FDIC call report data from Schwab's insured bank charters shows net loans and leases rising for nine consecutive quarters, reaching $67.2 billion in the April 2026 period, and net quarterly income from those charters rising for seven consecutive quarters to $1.007 billion. The FDIC series has not yet accumulated enough history for ORTEX to test whether it leads the company's reported figures, so it stands as colour on the balance sheet trend rather than a forward indicator. Retail attention has picked up sharply, with Wikipedia pageviews running at a z-score of 2.6 relative to the prior 90 days, the highest in recent months, consistent with the outsized post-earnings coverage.

October 22 brings the next scheduled earnings event. The previous print on October 15 produced a 5% one-day drop, and the July result produced a smaller 1.7% decline followed by a 3.3% gain over five days. With targets now mostly reset lower and the stock already sitting near BMO's new $97 ceiling, the question for the next session is less about whether the quarter is strong in headline terms and more about what the NIM trajectory and cash sorting data show for the path into 2027.