What Factors Affect Analysts’ Views of the Brokerage Industry?


Jun. 21 2018, Updated 10:30 a.m. ET

Ratings on Charles Schwab

In June, Charles Schwab Corporation (SCHW) is covered by 20 analysts. Six of these analysts recommended a “hold,” eight gave “strong buy” ratings, and one recommended a “sell.” The remaining five analysts suggested a “buy” on Charles Schwab stock, and there were no “strong sell” recommendations.

Moving forward, analysts’ ratings on brokerage companies (VFH) depend on global economic issues. Currently, brokerage companies are expected to witness a boost in their business fundamentals mainly due to the expectations of additional rate hikes.

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The US economy has witnessed lower unemployment rates, and the Federal Reserve is expected to announce another two rate hikes for a total of four in 2018. These factors are expected to improve these brokerages’ interest income. Moreover, the United States has levied tariffs on Chinese imports, which is expected to increase the volatilities of equities.

Ratings on TD Ameritrade

TD Ameritrade (AMTD) is covered by 19 analysts in June. Six recommended a “strong buy,” another six suggested a “hold,” and one gave a “strong sell” rating on AMTD stock. There were no “sell” ratings, and another six analysts recommended a “buy” on TD Ameritrade stock.

Of the 20 analysts that covered AMTD in May, eight suggested a “strong buy,” six recommended a “hold,” five gave “buy” ratings, and the remaining analyst gave a “strong sell” rating on the stock.

The daily average revenue trades (or DARTs) for Interactive Brokers Group (IBKR) in May reached 780,000, a decrease from its April DARTs of 812,000, which could impact the company’s second-quarter revenues. E*TRADE’s (ETFC) May DARTs reached 253,649, and its April DARTs reached 249,939.


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