SCHW heads into Thursday's earnings call with the most persistent insider selling story of the year — and a market that has turned notably less defensive than it was just weeks ago.
Charles Schwab, the firm's founder and Co-Chairman, sold roughly $10 million worth of stock on both May 4 and May 6. Those trades follow a string of disposals stretching back through late April — disposals on April 23, 27, 29, 30, and May 1 that collectively amount to well over $30 million. Net insider sales over the past 90 days total around $59.6 million. That is not a rounding error. The selling is systematic, the cadence daily, and at an average price in the low $90s — roughly 20% below the Street's average price target of $115.
The options market reads that tension differently. Put/call protection has unwound sharply. The put/call ratio dropped to 1.11, almost 1.5 standard deviations below its 20-day average of 1.24. In mid-April the ratio hit 1.43 — the highest of the past year — as the stock slid and macro anxiety was at its peak. Options traders have since dialled back their hedges considerably. The current reading is close to the annual low of 0.86, suggesting the market is no longer paying a premium to protect against downside into the print.
Short positioning tells a similarly low-key story, but with a notable recent uptick. Short interest has been hovering around a negligible 1% of free float for the past month, with borrow costs running below 0.3% — that's a deeply liquid name with plenty of shares available to borrow. What caught the eye this week: shorts rose roughly 19% in the past seven days, edging the SI % FF to 0.99%. That move is small in absolute terms, but it does represent the highest estimated short count in the 30-day window. Availability remains very loose — no squeeze dynamics anywhere in this lending market.
The Street is broadly constructive but has been trimming targets. JP Morgan's Kenneth Worthington raised his price target to $131 on April 17, the only upward revision in the recent cycle. Morgan Stanley moved in the opposite direction — twice — reducing its target from $148 to $125 across two cuts in early-to-mid April, while holding its Overweight rating. UBS, Barclays, Jefferies, and Truist all lowered targets as well, though none changed their positive ratings. The mean target at $115 still implies around 27% upside from current levels, a gap that reflects conviction about the NII recovery thesis even as near-term numbers disappoint. Revenue grew 15.8% year-over-year last quarter; net income hit $2.48 billion; and the firm carries $73 billion in cash. The trailing P/E sits at roughly 14x on the snapshot data — modest for a name with these margins.
Factor scores reinforce the cautious-but-not-bearish picture. The dividend score ranks at the 99th percentile; EPS momentum over 30 and 90 days sits in the 60th-to-68th percentile range. Short score, at 28, is low — ORTEX's model is not flagging this as a name under meaningful bearish pressure. The 12-month forward EPS growth rank is softer, in the 30th percentile, consistent with the bear case centred on NII headwinds and subdued client cash flows following the TD Ameritrade integration.
Among correlated peers, LPLA had the worst week — down more than 10% — while AMP held in relatively well, off less than 1%. RJF and MS were more resilient, with Morgan Stanley actually up 1.4% on the week. SCHW's own 2.4% decline puts it somewhere in the middle of the group. The relative underperformance versus AMP and MS is worth watching given SCHW's higher direct sensitivity to interest rate timing and cash sweep dynamics.
The question Thursday's call answers is whether Q1 momentum — strong DATs, improving PAL balances, better capital ratios — can override the persistent drag from client cash repositioning and the macro uncertainty that spooked analysts into cutting targets through April. The founder is evidently not waiting for the answer.
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