Schwab Stock Underperforms Dow Despite Strong YTD Gains
Charles Schwab Corporation (SCHW), a prominent financial holding company headquartered in Westlake, Texas, has demonstrated significant growth and influence within the investment landscape. Currently boasting a substantial market capitalization of $161.2 billion, Schwab’s operations encompass a wide array of financial services, including comprehensive wealth management strategies, robust securities brokerage services, banking solutions, sophisticated asset management programs, secure custody offerings, and specialized financial advisory expertise. The company’s scale—with over 32,000 employees and overseeing assets exceeding $11.6 trillion—clearly positions it as a large-cap stock, a designation commonly applied to companies valued at $10 billion or more. Schwab’s overarching mission is to fundamentally reshape Wall Street’s traditional approach to investing, prioritizing enhanced client experiences and improved access to financial services. With 36 million active brokerage accounts, Schwab aims to disrupt the industry by offering a more user-friendly and effective investing platform.
Recent market performance indicates Schwab’s stock has experienced a notable fluctuation. As of the last reported trading session on the date of publication, the stock touched its all-time high of $99.59 on July 29th, but is currently trading approximately 7.8% below that peak. Over the past three months, Schwab’s stock has decreased by 5.6%, lagging behind the performance of the Dow Jones Industrial Average ($DOWI), which has increased by 4.4% during the same period. However, when analyzing longer-term performance, Schwab has exhibited impressive gains. On a year-to-date (YTD) basis, SCHW stock has surged by 24%, and over the past year, it has risen by 11.6%, significantly outperforming the Dow Jones’s 11.5% gains in 2025 and delivering 5.7% returns over the past 52 weeks. This sustained growth demonstrates Schwab’s ability to adapt and capitalize on market trends.
The company’s recent financial results, released on October 16th, further solidified its position. Despite a momentary dip in trading sessions following the release, Schwab’s stock remained positive for the subsequent three trading days. The company’s strong performance is evidenced by a 17% surge in client assets, reaching $11.6 trillion compared to the year-ago quarter. Additionally, Schwab generated $137.5 billion in core net new assets during Q3, bringing the total YTD asset gathering to $355.5 billion, representing a substantial 41% year-over-year increase. This impressive growth highlights the continued demand for Schwab’s services and the trust investors place in the company. The company’s core net revenues grew by 26.6% year-over-year, successfully exceeding analyst expectations by 3%. Moreover, Schwab achieved an adjusted earnings per share (EPS) increase of 70.1% year-over-year, reaching $1.31 and surpassing consensus estimates by 5.7%.
Despite these positive results, Schwab’s stock has somewhat underperformed relative to its peer, Morgan Stanley (MS). Morgan Stanley’s stock has recorded considerably higher returns, with 33.6% gains in 2025 and 27.9% returns over the past 52 weeks. As of the publication date, the consensus analyst rating for SCHW stands at “Moderate Buy.” The average price target for Schwab is currently $112.30, indicating a potential upside of 22.3% from the stock’s current price levels. It is important to note that Aditya Sarawgi did not hold (either directly or indirectly) any positions in the securities mentioned in this article, and all information and data are provided solely for informational purposes, originating from Barchart.com.
