Citi analysts downgraded shares of Charles Schwab (NYSE:SCHW) to Neutral and opened a 90-day negative catalyst watch on the stock in a note to clients. The bank lowered its price target for the stock to $70 from $75 per share.
Citi said that after the recent strength in the stock, they see a more balanced risk/reward at current levels and view the current price as a fair valuation.
"While cash sweep trends have improved, that was already reflected in our estimates, and we do not expect cash sweep as % of assets to return to historic levels," said Citi.
"Over the past several weeks, the stock has performed well on the back of improving transactional sweep trends and lower rate expectations, but we see a balanced risk/reward here given near-term risks and our view of normalized EPS in ‘25," the investment bank added.
Furthermore, Citi established a negative catalyst watch due to the potential headline risk from SEC market structure rules and the last AMTD customer transition of its most active trading clients.