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Credit Suisse upgraded shares of Charles Schwab (NYSE:SCHW) to Outperform from Neutral in a note Wednesday, stating that the move is to take advantage of the sharp share price decline in the company’s share price.
SCHW shares fell significantly in reaction to the collapse of SVB and the uncertainty surrounding banking stocks. However, it closed up over 9% on Tuesday, while they are down 0.4% Wednesday premarket.
Even so, CS analysts said in a note that while the shares are slightly off the recent bottom, they “still see attractive upside to our revised Sum-of-the-Parts (SOTP)-derived $67.50 target price (from $81.50).”
“We expect client sorting will persist, but such risks seem manageable and seemingly close to peaking – based on current forward curves,” they said.
The analysts acknowledged that the central risk to the upgrade would be a significant shift in forward curve expectations.
