TD Cowen Raises Charles Schwab's Price Target Amid Robust Earnings and Positive Outlook

Charles Schwab Corporation (NYSE:SCHW) continues to attract positive analyst attention as TD Cowen raised its price target for the stock from $135 to $138, maintaining a Buy rating. Currently trading at $103.84, Schwab's share price hovers just below its 52-week peak of $104.98, having appreciated by approximately 27.84% over the past year. Based on data from InvestingPro, the stock appears undervalued relative to its intrinsic Fair Value estimate. The upgraded price target stems from TD Cowen's recognition of Schwab's strong performance in the fourth quarter and a favorable earnings outlook extending through 2026 and 2027. The firm adjusted its projected earnings per share (EPS) higher for these years, situating the new valuation target at around 21.5 times the updated 2027 EPS estimate. This valuation aligns closely with the current price-to-earnings (P/E) ratio of 21.72 and is bolstered by an attractive price/earnings to growth (PEG) ratio of 0.39, suggesting the stock remains reasonably priced relative to expected earnings expansion. TD Cowen's bullish stance covers several foundational components of Schwab's earnings model, including client account flows, cash management, operational efficiency, earnings leverage, and strategic capital deployment. The analysts also note that Schwab's management has been proactive in mitigating tail risks, contributing to a more resilient business profile. With a market capitalization nearing $184.78 billion, Charles Schwab sustains its reputation as a leading entity in the Capital Markets sector, boasting a remarkable 37-year streak of consecutive dividend payments. The investment firm underscored a particularly strong fourth-quarter performance in client cash dynamics that exceeded expectations and reiterated confidence in the company reaching $7 EPS by 2027. Projected returns on tangible common equity surpass 40% during 2026-2027, highlighting efficient capital utilization. TD Cowen identifies Charles Schwab as a "top idea for '26", pointing out that substantial upside potential remains within its operating model, especially around client cash activity. These projections are supported by Charles Schwab's recent fourth-quarter 2025 earnings announcement, where the company posted an EPS of $1.39 and revenues of $6.34 billion, in line with market forecasts. The full fiscal year results reflected record net revenues of $23.9 billion, an increase of 22% year-over-year, alongside a 50% jump in adjusted EPS to $4.87. In response to these results, Jefferies elevated its price target for Schwab to $122, crediting stronger-than-expected fourth-quarter key performance indicators such as elevated daily average trades and record client asset levels. Raymond James also raised its target to $121 while maintaining an Outperform rating, attracted by robust core metrics including net new assets and account growth. Moreover, Citizens maintained its Market Outperform rating and a price target of $120, emphasizing Schwab’s growth potential as it moves into 2026. These consensus upgrades signify a continued analyst confidence in Charles Schwab's solid earnings trajectory, operational strength, and capacity for sustained market growth.