Posted on 03/13/2023 9:17:00 AM PDT by BenLurkin
Analysts Christopher Allen and Alessandro Balbo from Citi raised their rating on the bank's stock to Buy from Hold as investors consider the fallout from the failures of Silicon Valley Bank and Signature Bank. After a roughly 23% decline over the past two trading days, the stock is trading at compelling levels, the duo said, citing its price-to-earnings ratio.
The stock was trading at nearly 13 times the per-share earnings expected for the coming year, FactSet data show, which represents a nearly 45% discount to its average P/E ratio of 23.5. The highest valuation the discount broker has recorded in the past five years is a P/E ratio of 37.4 times.
The discount comes as investors consider whether other banks could fall following the collapse of Silicon Valley Bank last week and the closure of New York-based Signature Bank late on Sunday. Regulators guaranteed all deposits of Silicon Valley Bank and Signature, after a sale of securities and attempt to raise capital by SVB, a lender to startups, raised concern about its financial health, triggering a classic bank run.
But Charles Schwab doesn't face a risk of customers pulling out their money en masse, the Citi analysts said, pointing to the composition of its deposit base of $366.7 billion as of the end of 2022. The analysts said Schwab's deposits are composed largely of individual investor accounts and registered investment advisory or RIA custody accounts, which are roughly 80% insured, according to the company.
(Excerpt) Read more at barrons.com ...
Well managed bank stock would probably be even a better bargain. I say this as a Schwab customer.
Looking at the market what crisis.
Now
Bullion rules.
Gold up $27 and Silver up $1.25
Time to check for quarters before 1963
80% of Schwab accts are under $250K.
The OVERARCHING KEY to this entire affair is, as usual, to ignore the MSM, who have agenda.
These banks are not failing because of crypto, or high tech startups or anything like that. It is because they have bond portfolios and the value or price of a bond declines when interest rates rise.
Simply that.
Rates are rising, their portfolio value is plummeting, and that threatens them falling under Fed regulatory capital requirements.
There is nothing anyone can do about this. The Fed dares not stop raising because if inflation then surges, everything will fall apart.
Well, Charles Schwab just told me to buy Citi.
But what does E.F. Hutton say?
They make their money the old-fashioned way.
I didn’t know until today that E.F Hutton built Mar-a-Lago for his wife.
Lol. I got my Series 7 at Hutton, two months before they pleaded guilty to 2000 felony counts of check kiting.
But what does Jim Cramer say? That will be the real tell on whether to worry or not.
SPIC coverage is 500k half of which can cover cash.
BUY BEAR STEARNS!!!
Buy U.S Treasuries !! :)
Nod.
SIPC, btw.
Yeh, do that. 🙄
Please do as they bought TD Ameritrade and I use them as my broker....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.