Stronger earnings and revenue growth seen ahead; maintaining our fair value estimate on Schwab stock of $87.
Key items to watch for include a slowdown in economic growth, normalization of credit costs, and a potential pivot by the Fed to a easier monetary policy.
Sector’s stocks are undervalued despite likely softening economy.
But charge-offs and declining fee revenue should offset any benefits of rising interest rates.
Despite results that disappointed the market, the company's underlying fundamentals and prospects for material earnings growth remain solid.
Credit services and asset management are undervalued.
We are incorporating higher interest-rate expectations into our model.
Concerns about inflation, monetary policy, and interest rates dinged performance during 2021's fourth quarter.
Two names are well-positioned to capitalize on potential SPAC opportunities.
Asset-related fees climbed while expenses remained well managed. We don’t anticipate a change to our fair value estimate.
We don’t anticipate making a material change to our fair value estimate for the narrow-moat company.
Insurers should benefit from pricing increases.
Though it has a positive medium- and long-term growth trajectory.
It reported strong Q2 results and high capital returns.
After recent runup in prices, the sector is about 10% overvalued.
We don’t anticipate a material change to our $70 fair value estimate.
We don't plan on making a change to the wide-moat company's fair value estimate.
Most of the sector is fairly valued.
We don’t plan on making a material change to our $51 fair value estimate for the wide-moat firm.
The organic growth for the narrow-moat firm is dependent on market returns.
We may increase our current $47 fair value estimate by up to 10%.
Most financial stocks are trading above our fair value estimates.
We look for the bottom in net interest income and trading.
Nasdaq recently announced the acquisition of Verafin, an anti-financial crime solutions provider, which will speed up its shift to more software-as-a-service revenue.
We don’t anticipate making a material change to our $56 fair value estimate for Morgan Stanley and assess shares as fairly valued.
We don't anticipate on changing our fair value estimate for the wide-moat company, and we assess the shares as undervalued.
We don't expect to change our fair value estimate for narrow-moat Morgan Stanley.
Some high-quality financial services firms are trading at decent discounts.
We don’t anticipate a change to our $218 fair value estimate.
We don’t anticipate making a material change to our $49.50 fair value estimate for the narrow-moat company.
TD Ameritrade reported strong fiscal third-quarter results, as high trading volumes are offsetting a decline in interest rate-related revenue.
We think the shares are undervalued.
Banks are the most undervalued subsector.
We consider both stocks to be fairly valued.
The combination will cement Schwab's position as one of the key players in the financial sector.
We don’t anticipate making a material change to our fair value estimate for the narrow-moat firm and assess shares as moderately undervalued.
We don't anticipate making a material change to our fair value estimate and assess the shares as modestly undervalued.
For this wide-moat firm, we don't anticipate making a material change to our fair value estimate and currently assess shares as modestly undervalued.
But Michael Wong offers a peek at the bright side.
Berkshire an ideal defensive investment for the long term.
We don't at this time anticipate a material change in our fair value estimate for Morgan Stanley.
We don’t anticipate making a material change to our per share fair value estimate and assess shares as fairly valued.
We don’t anticipate making a material change to our fair value estimate, and we assess the shares as being fairly valued.
The wide-moat firm looks fairly valued.
Shares of the narrow-moat firm are fairly valued today.
Market overestimated likelihood of a recession; financial-services stocks trading at a premium to our fair values.
We believe that Schwab's already strong business model will be enhanced by the merger with TD Ameritrade, and we expect to assign a wide moat to the combined entity.
If a deal is announced, we anticipate multiple hurdles including a headline risk of antitrust, but we currently believe it's surmountable.
We explain our latest views on Charles Schwab, TD Ameritrade, and E-Trade.