- Compass Point analyst Chris Allen upgrades Charles Schwab (SCHW +1.8%) to buy from neutral as he expects "compelling" earnings and margin growth after acquiring TD Ameritrade (AMTD +2%).
- Boosts price target to $60 from $45, tying the Street high.
- Allen expects a "lengthy positive EPS revision cycle moving forward with both the AMTD and USAA deals expected to drive positive EPS accretion in 2021 and beyond."
- Regarding concerns on overlapping registered investment advisor customers, Allen sees some attrition, but expects the two companies to combine the best attributes of their platforms.
- Quant rating for Schwab is Neutral; before this action, the Sell-Side average rating was already Bullish (5 Very Bullish, 2 Bullish, 11 Neutral).