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Highlights

  • Redburn Atlantic upgrades Charles Schwab from “Sell” to “Neutral” and raises price target to $82, up 26.15%.

  • YTD return stands at 20% and 12% rise in client assets to $9.89 trillion.

  • Analysts see risks in future earnings, with estimates 5% below consensus from FY25–FY27.

Shares of Charles Schwab Corporation (NYSE:SCHW) are in the spotlight following a significant rating upgrade from Redburn Atlantic. Analyst Charles Bendit lifted the stock’s rating from “Sell” to “Neutral” and simultaneously raised the price target from $65 to $82, a 26.15% increase.

This revision comes at a time when Charles Schwab's stock is trading near its 52-week high of $89.84, reflecting year-to-date gains of 20%. The upgrade has sparked discussion across the investment community, particularly given Schwab’s prominent role in U.S. retail wealth management.

Redburn’s revised outlook highlights that cash sweep pressure—once a major concern—is easing, allowing Schwab to reduce its reliance on expensive funding sources. This has been a key catalyst behind the stock’s valuation rerating from about 12x forward P/E in 2023 to roughly 19x currently. 

The company commands a market cap of $160 billion and has achieved consistent revenue growth of approximately 11%. Moreover, its reputation for financial discipline is reinforced by 37 consecutive years of dividend payments.

Analysts noted that the recovery in cash sorting may not be fully sustainable, and their own EPS estimates for 2025 through 2027 are about 5% lower than consensus. There are concerns that future changes in Schwab’s business model, such as a reduction in asset duration or a contraction of its banking segment, could potentially curb earnings power.

In tandem with the rating upgrade, Schwab’s Monthly Activity Report for April 2025 provided further evidence of the company’s momentum. Client assets climbed to $9.89 trillion, a 12% increase year-over-year, while the firm also saw a 22% jump in newly opened brokerage accounts, totaling 439,000 for the month. Daily average trades also rose by 14% month-on-month.