Charles Schwab Poised for Strong Q3 Earnings, Outperforming Market Expectations

Charles Schwab (SCHW) Earnings Preview: Analysts Expect Strong Q3 2025 Results

The Charles Schwab Corporation (SCHW), a leading financial services firm headquartered in Westlake, Texas, is set to announce its fiscal third-quarter earnings for 2025 before the market opens on Thursday, Oct. 16. Analysts anticipate a significant increase in earnings per share (EPS) compared to the previous year.

Earnings Expectations for Q3 2025

Ahead of the earnings release, analysts predict SCHW will report a profit of $1.22 per share on a diluted basis. This represents a substantial 58.4% increase from the $0.77 per share reported in the year-ago quarter. Notably, Charles Schwab has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports.

Full-Year and Future Outlook

For the full year, analysts expect SCHW to report an EPS of $4.65, indicating a 43.1% increase from $3.25 in fiscal 2024. Furthermore, EPS is projected to rise 16.6% year-over-year to $5.42 in fiscal 2026. These optimistic forecasts reflect confidence in the company's continued growth trajectory.

Stock Performance and Key Drivers

SCHW stock has demonstrated strong performance, outperforming the S&P 500 Index ($SPX) and the Financial Select Sector SPDR Fund (XLF) over the past 52 weeks. Shares are up 46.3% during this period, compared to the S&P 500's 17.6% gains and XLF's 18.2% gains.

This outperformance is attributed to several factors, including strong asset management and trading revenues, higher net interest income, solid growth in brokerage accounts, declining funding costs, strategic acquisitions, and increased advice solution fees.

Q2 2025 Results Recap

In July, SCHW reported strong Q2 results, with adjusted EPS of $1.14, exceeding the consensus estimate of $1.09. The company's revenue was $5.9 billion, also surpassing the consensus estimate of $5.7 billion. These positive results further bolster investor confidence in the company's financial health.

Analyst Ratings and Price Targets

Analysts' consensus opinion on SCHW stock is "Moderate Buy." Out of 22 analysts covering the stock, 13 advise a "Strong Buy" rating, four suggest a "Moderate Buy," three give a "Hold," one recommends a "Moderate Sell," and one advocates a "Strong Sell." SCHW’s average analyst price target is $108, indicating a potential upside of 16.5% from current levels.

Zacks Investment Research Analysis

Zacks Investment Research indicates that Charles Schwab (SCHW) could potentially beat earnings estimates again. Charles Schwab has a history of surpassing earnings estimates, averaging a surprise of 4.29% in the last two quarters. The company reported earnings of $1.14 per share for the last reported quarter, surpassing the Zacks Consensus Estimate of $1.09 per share.

The Zacks Earnings ESP (Expected Surprise Prediction) for Charles Schwab is positive at +4.70%, suggesting analysts have recently become bullish on the company's earnings prospects. Combined with a Zacks Rank #3 (Hold), this indicates that another earnings beat is possible.