jetcityimage/iStock Editorial via Getty Images
Charles Schwab (NYSE:SCHW) stock retreated 5% on Thursday after Morgan Stanley downgraded the brokerage firm to Equalweight from Overweight due to uncertainty surrounding the outlook for interest rates and thus cash-sorting trends.
Since the tumult in the banking sector that started earlier this month, investors have steered clear of SCHW, down 32.8% M/M, on fears that the company could face a deposit flight of its own.
But Schwab (SCHW) Chief Executive Walt Bettinger assured investors in a recent interview with the Wall Street Journal that the company could keep operating even if it faced outsized deposit outflows over the next year. And J.P. Morgan went as far as to say that SCHW seemed to be benefitting from the banking crisis, as its weekly inflows surged to much greater-than-usual levels.
The Quant system also views SCHW as a Hold with the worst factor grades in valuation and momentum. The average SA author and the average Wall Street analyst each are more bullish, rating the stock as a Buy.