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Charles Schwab’s Target, Estimates Cut at Topeka Capital; Low Margins, Interest Rates are Overhangs (SCHW)

Analysts at Topeka Capital Markets on Wednesday offered some bearish commentary on brokerage operator Charles Schwab Corp. ( SCHW ).

The firm maintained its "Hold" rating on SCHW but lowered its price target to $13. That new target suggests a small upside to the stock's Tuesday closing price of $12.41.

A Topeka Capital analyst commented, "We are trimming our price target and EPS estimates for Charles Schwab Corp. ahead of 2Q12 earnings, primarily due to yet another pull-back in interest rates and ongoing tepid trading activity. Furthermore, we expect management's forward outlook for net interest margin ( NIM ) will prove uninspiring based on continued rate weakness, and trading activity should remain muted as we move through the seasonally slow summer period. We expect SCHW shares to remain range-bound as rates stay depressed and macro progress remains inconsistent."

Charles Schwab shares were mostly flat in morning trading Wednesday.

The Bottom Line

Shares of Charles Schwab ( SCHW ) have a 1.93% dividend yield, based on last night's closing stock price of $12.41. The stock has technical support in the $10.50-$11.00 price area. If the shares can firm up, we see overhead resistance around the $14.00-$14.50 price levels.

Charles Schwab Corp. ( SCHW ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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