Schwab’s $1.62 EPS and $7.07 billion revenue beat estimates, but shares fell 2.5% as Morgan Stanley cites positioning over fundamentals.
Charles Schwab reported second-quarter adjusted earnings of $1.62 per share on record revenue of $7.07 billion, surpassing Wall Street expectations. The company also lifted its full-year revenue growth outlook to 17.5%-18.5%, up from 14%-15% previously projected.
Despite the strong results, Schwab’s shares declined roughly 2.5%, which Morgan Stanley attributed to market positioning rather than fundamentals. The firm noted that the earnings beat stemmed from trading and lending activity, not interest rate assumptions, which remained unchanged at 3.00%-3.10% for the year.
CEO Rick Wurster highlighted stronger client engagement and transaction activity, driven by generational and technological shifts, as key revenue drivers. Morgan Stanley emphasized the distinction, as Schwab’s stock has historically been tied to interest rate expectations.