On Wednesday, brokerage giant Charles Schwab got a key rating increase. But even the upwardly revised rating doesn't fully reflect the stock's underlying strength. The Relative Strength (RS) Rating for Schwab stock climbed from 66 to 73 on Wednesday.
The raised 73 RS Rating puts Schwab stock in the top 27% for price performance this past year. However, its Earnings Per Share Rating is a bullish 93 out of 99. And its Composite Rating, an amalgam of IBD's five other key ratings, is a superior 94. All is not sunshine and roses for the Westlake, Texas-based company though. It has a D- Accumulation/Distribution Rating, on an A+ to E scale, meaning that big money investors like ETFs and mutual funds aren't onboard yet.
Turnaround Underway For Schwab Stock?
That outlook by big investors could change though, based on Schwab's recent fundamentals performance. Over the past three quarters it posted 39%, 31% and then 24% earnings growth on a year-over-year basis. Revenue growth for those quarters accelerated from 13% to 26% and then 30% last quarter. That was a turnaround from the first quarter of 2022, when it posted an 8% drop in EPS on flat revenue growth. In its most recent quarter Schwab reported $1.07 EPS on $6.31 billion revenue.
Market research shows that the best stocks typically have an 80 or higher RS Rating in the early stages of their moves. See if Charles Schwab can continue to show renewed price strength and hit that benchmark.
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Schwab stock is building a cup with handle with an 86.73 buy point. See if the stock can break out in volume at least 40% above average. On Wednesday, Schwab dipped fractionally to above 77.
Among Top Stocks In Group
Schwab stock holds the No. 5 spot in the group by ratings, according to IBD Stock Checkup. Additionally, it's the largest company by market cap in the 32-company Finance-Investment Banking/Brokers industry group. LPL Financial Holdings and Ameriprise Financial are also among the group's highest-rated stocks.
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