Deutsche Bank Starts Charles Schwab Corp. (SCHW) at Buy

Deutsche Bank initiated coverage on Charles Schwab Corp. (NYSE: SCHW) with a Buy rating and a price target of $34.00. The stock was also named a top pick.

Analyst Brian Bedell said,"We favor SCHW’s business model within the online broker space and believe it will allow the shares to maintain a premium P/E for the following reasons: 1) SCHW’s broad financial services offerings drive greater client wallet shares & with potential for better client economics, 2) SCHW has greatest leverage to rising rates vs. peers, 3) SCHW has less reliance on volatile trading vs. peers, 4) innovative products/services has enabled good organic growth despite largest client asset base, and 5) SCHW’s cash mgmt should provide substantial buffers to market and/or trading downturns. Key catalysts for the stock over the next 12 months are: 1) improving US economic data that advances speculation on timing of short-term interest rate cycle, 2) steady client asset organic growth trends, 3) material NIM expansion likely beginning in early 2015, and 4) expanding operating margins as >75% of incremental rate driven-revenue drops to pretax income."

For an analyst ratings summary and ratings history on Charles Schwab Corp. click here. For more ratings news on Charles Schwab Corp. click here.

Shares of Charles Schwab Corp. closed at $27.59 yesterday.

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