Schwab gathered a record $190.4 billion last quarter with loans up 35 percent. At $92.01, 12.5 times 2027 profit is too low, leaving 28 percent upside to $117.62.
Key points
- $190.4 billion in Q3 FY26 of core new assets, up 38 percent from Q3 FY25.
- 3.04 percent in Q3 FY26 of net lending margin, with growth to Q4 FY26 still expected.
- $72.3 billion in Q3 FY26 of bank loans, up 35 percent from Q3 FY25.
The call
The market is too pessimistic after the selloff. At $92.01 per share in October 2026 the stock pays only 12.5 times my $7.35 profit per share in FY27. That price implies loan growth stalls and funding costs eat the margin gain.
Quarterly net revenue ($ billions)SEC XBRL and Oct 15 2026 release, as of Oct 16 2026.
I see faster growth instead. Revenue reached $7.17 billion in Q3 FY26 with $1.69 adjusted profit per share in Q3 FY26. Bank loans up 35 percent in Q3 FY26 and $190.0 billion of low yield bonds rolling off can drive $7.35 per share in FY27.
Adjusted profit per share ($)Adjusted EPS from earnings releases, plus own estimates as of Oct 16 2026.
Valuation
| Measure | Value |
|---|
| 2026 revenue | $28.11 billion in FY26 |
| 2026 adjusted profit | $6.46 per share in FY26 |
| 2027 adjusted profit | $7.35 per share in FY27 |
| Multiple | 16 times profit in FY27 |
| Target | $117.62 per share in 12 months |
Sixteen times profit fits a scale brokerage with bank earnings (a firm that earns spread income on client cash and loans). Slower peers trade near that level in October 2026. Upside near 28 percent to October 2027 against downside near 9 percent supports a buy.
Risks
- Loan demand cools and balances stall in 2027, which you would see in flat bank loan balances for two quarters in 2027.
- Client cash moves to higher yields as rates rise in 2027, which you would see in falling bank deposits for two quarters in 2027.
- Trading calms from record levels in 2027, which you would see in daily average trades below 9.0 million for two quarters in 2027.
What would change my mind
Core asset growth below 4 percent per year through mid 2027 with shrinking lending margin in 2027 would break the case.