Shares of Charles Schwab (SCHW 0.13%) were up 6.8% as of 3:15 p.m. ET Thursday after the financial services firm reported better-than-expected growth in total client assets last month.
Schwab's client assets return to growth
In a press release this morning, Charles Schwab announced its total client assets at month-end November 2023 were up 12% year over year, and up 7% sequentially (from $7.65 billion in October) to $8.18 trillion. Meanwhile, Charles Schwab's core net new assets grew by $21.7 billion last month. Transactional sweep cash (or cash from accounts that automatically transfer funds into higher-interest accounts at the close of each business day) also grew by $5 billion sequentially to $402.9 billion -- the metric's biggest increase since March 2022.
The shift is encouraging for Charles Schwab, in particular, as the firm had seen total client assets decline sequentially for the past four straight months since peaking at $8.24 billion in July.
What's next for Charles Schwab stock?
Even so, Charles Schwab also told investors to expect full-year 2023 revenue to decline by 9.5% to 10% from 2022, hurt by a combination of lower transactional cash levels, lower trading volumes, and "subdued securities lending activity." That outlook was technically below analysts' consensus estimates, which call for 2023 revenue to fall a more modest 8.4%.
If the tide is truly shifting in Charles Schwab's favor, however -- and with shares of the leading financials stock still down 15% year to date even after today's pop -- it's easy to understand why investors are willing to overlook its underwhelming near-term guidance today.
