The outlook is rosy for shares of Charles Schwab , according to Citi. Analyst Christopher Allen upgraded the financial services stock to a buy rating from hold. The analyst’s price target of $102, up from $85, represents a potential upside of around 31%. Shares of Schwab have gained 5% this year, bringing their total 12-month rally to nearly 9%. SCHW 1Y mountain SCHW 1Y chart As a catalyst, Allen pointed to Schwab’s acquisition of TD Ameritrade. While this deal closed in late 2020, the analyst believes that Schwab has only recently finally completed its integration of Ameritrade’s previous clients. “We are upgrading SCHW to Buy as we see an improving growth story ahead,” he wrote. “With the Ameritrade client integration behind them, SCHW has transitioned to offense, and we see an improving net new asset story moving forward as they continue to see greater penetration of legacy Ameritrade clients and drive initiatives for growth through targeted marketing, reoptimizing branch networks, and hiring new financial consultants to accelerate asset gathering and deepen customer relationships.” Specifically, Allen pointed to Schwab management’s increasing confidence that net new asset growth can accelerate this year, eventually returning to its long-term growth rate target of between 5% and 7%. Meanwhile, trading activity has been robust in the first quarter, which should boost the unit’s revenue. Although market uncertainty could contribute to near-term turbulence, Schwab management doesn’t expect a “material impact on the growth trajectory,” he said. The analyst added that he is especially optimistic about Schwab’s “healthy capital return story” in the long run. He expects Schwab will increase share buybacks, following the precedent it has set for TD share repurchases. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
