When Charles Schwab reports second-quarter earnings on Tuesday, Wall Street analysts will be asking how the company can maintain its momentum amid a strong period of growth for brokers and wealth managers.
Wall Street analysts expect Schwab will report adjusted earnings per share of $1.56 compared with $1.14 for the same period a year ago, according to estimates compiled by FactSet. Analysts forecast revenue will come in at $6.9 billion. Schwab reported $5.9 billion for the same period a year ago.
Other banks and brokers with large wealth management operations that have reported second-quarter earnings, such as Morgan Stanley, have posted large increases in total client assets and strong asset-gathering numbers because of a bull market for stocks that has enticed individual investors to add funds to their brokerage accounts. Net new assets is a closely watched growth metric for these firms. Schwab likely benefited from the same trends during the second quarter even though the period includes a notable headwind to asset gathering: tax season. Clients typically pull money from accounts to pay tax bills in April.
The Westlake, Texas-based company serves both individual investors and registered investment advisors, providing the latter group with technology and custodial services. Schwab is one of the nation's largest financial services companies with $13.14 trillion in client assets as of the end of May.
On the earnings call, analysts will look for updates about how Schwab is using artificial intelligence internally to improve efficiency. They'll also likely ask what AI tools the company is providing to individual investors, a hot topic in the brokerage industry. Some of Schwab's competitors, such as Robinhood and Interactive Brokers, have recently allowed customers to connect their own AI agents to their accounts to trade on their behalf.
Concerns about AI threats weighed on brokerage stocks earlier this year. Shares of Schwab have recently bounced back after falling earlier this year and are now up 2.7% year to date as of midday Monday. The benchmark S&P 500 index is up 8.7%.
In addition to AI, analysts will look closely at Schwab's lending activities. It has been making a concerted effort to provide more customers with mortgages, securities-based loans, and other types of loans. The company earns a significant chunk of its revenue from net interest income, which is the difference between what Schwab earns on interest-bearing assets, such as loans, and what it pays out to customers in interest on its sources of funding, such as cash deposits.
J.P. Morgan Securities analyst Kenneth B. Worthington raised his December 2026 price target for Schwab to $137 from $131 on July 15 in part because of better market conditions. He rates shares Overweight. In his research note, Worthington writes that he expects Schwab's interest-earning assets to grow from current levels as the company enters "the more seasonally favorable" second half of the year when it faces fewer headwinds to asset-gathering, such as tax season.
Schwab may also provide updates on its efforts to grow its in-house wealth management offering as well as its asset management and workplace businesses. The workplace business serves corporate clients' equity plans and retirement plans, such as 401(k)s, and is an important source of retail client referrals.
Write to Andrew Welsch at andrew.welsch@barrons.com
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July 20, 2026 16:15 ET (20:15 GMT)
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