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SCHW shares fell almost 5% during the Tuesday session. It is up just over 2% on Wednesday but is down around 31% so far this year.
The sell-off provides an “even more attractive risk/reward,” said the analysts, who maintained a Buy rating and $73 price target on the stock.
The firm believes the sell-off was catalyzed by SCHW’s debt offering announced this morning. On August 22, SCHW filed a prospectus to issue senior unsecured fixed and floating rate notes. While not settled yet as of this writing, a Bloomberg article cited this as a total offering of $2.35bn in new debt,” the analysts explained.
They believe the debt offering announcement “rekindled some investor concerns around the pace of client cash sorting, liquidity, and capital levels – each of which we continue to believe are overblown.”
“We would use the sell-off as a buying opportunity,” they concluded.
