Charles Schwab Won't Be Dead Money For Long

Charles Schwab stock has underperformed the big banks, but robust trading activity and asset inflows signal strong business momentum. The firm posted record Q2 revenues of $7.1B (+21% YoY) and expanding margins, with expense growth well-contained and solid operating leverage. Guidance for 2026 shows revenue growth of 17.5–18.5% and pre-tax margins in the low 50% range, supporting a positive outlook despite modest growth deceleration. A forward P/E near multiyear lows, strong fundamentals, and new growth initiatives justify my buy rating as the valuation disconnect presents opportunity.

Within the financials sector, the big banks have been seeing major tailwinds. A boom in deal-making and volatility in equity markets has fueled major stock gains for companies like JPMorgan (JPM) and