It's been a mediocre week for The Charles Schwab Corporation (NYSE:SCHW) shareholders, with the stock dropping 15% to US$63.80 in the week since its latest second-quarter results. The result was positive overall - although revenues of US$4.7b were in line with what the analysts predicted, Charles Schwab surprised by delivering a statutory profit of US$0.66 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Charles Schwab after the latest results.

Taking into account the latest results, the consensus forecast from Charles Schwab's 15 analysts is for revenues of US$19.2b in 2024. This reflects a credible 3.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 20% to US$2.90. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.5b and earnings per share (EPS) of US$2.95 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$77.20, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Charles Schwab, with the most bullish analyst valuing it at US$90.00 and the most bearish at US$63.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Charles Schwab's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.0% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.5% per year. Even after the forecast slowdown in growth, it seems obvious that Charles Schwab is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$77.20, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Charles Schwab going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Charles Schwab that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com