Charles Schwab SCHW is scheduled to report second-quarter 2026 earnings on July 21, before market open. The company’s quarterly earnings and revenues are expected to have increased on a year-over-year basis.
Schwab’s first-quarter 2026 earnings outpaced the Zacks Consensus Estimate, driven by the solid performance of the asset management business and higher trading revenues. Higher net interest revenues (NIR) and solid brokerage account numbers were other positives.
The company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 3.8%.
The Charles Schwab Corporation Price and EPS Surprise
The Charles Schwab Corporation price-eps-surprise | The Charles Schwab Corporation Quote
Before we take a look at what our quantitative model predicts, let us check the factors that are likely to have impacted Schwab’s second-quarter performance.
Factors Likely to Influence Schwab’s Q2 Earnings
Trading Revenues: Client trading activity remained strong in the second quarter of 2026, driven by elevated market volatility amid shifting expectations for artificial intelligence, persistent inflation, ongoing geopolitical tensions and a more hawkish Federal Reserve. These factors fueled increased activity across equities, fixed income, foreign exchange and commodities markets.
Schwab continued to expand its client base, with new brokerage account openings rising in the first two months of the quarter and core net new assets increasing year over year.
Backed by healthy client engagement and a favorable trading backdrop, Schwab is expected to have delivered solid growth in trading revenues. The Zacks Consensus Estimate for trading revenues is pegged at $1.14 billion, indicating a 19.7% year-over-year increase.
NIR: The consensus estimate for SCHW’s average interest-earning assets for the to-be-reported quarter is $446 billion, indicating a year-over-year rise of 5.4%.
In the quarter, the Fed kept interest rates unchanged, while signaling a hike later in the year because of persistently high inflation. This is expected to have created a favorable backdrop for SCHW. Thus, supported by growth in loans and stabilizing funding/deposit costs, the company’s NIR is expected to have been positively impacted.
SCHW’s continued focus on repaying high-cost bank supplemental funding balances is expected to have further supported growth.
The Zacks Consensus Estimate for second-quarter NIR is pegged at $3.28 billion, indicating a rise of 16.1% from the prior-year quarter’s actual.
Asset Management & Administration Fees: Schwab’s asset management and administration fees are expected to have benefited from higher average client assets in the second quarter, supported by favorable equity market performance and continued growth in advisory solutions. In April and May, Schwab’s client assets receiving ongoing advisory services grew from the prior-year periods.
The consensus estimate for asset management and administration fees for the to-be-reported quarter is pegged at $1.81 billion, which implies year-over-year growth of 15.4%.
Expenses: Schwab’s operating expenses have been elevated in the past few quarters. Due to persistent regulatory spending and strategic acquisitions, marketing and advertising, and efforts to enhance business efficiency, expenses are likely to have increased in the to-be-reported quarter. Also, the company’s plan to expand its branch network and hire for branch-related positions is expected to have led to higher expenses.
What the Zacks Model Reveals for Schwab
According to our quantitative model, the chances of Schwab beating the Zacks Consensus Estimate for earnings this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Schwab is +2.30%.
Zacks Rank: The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Q2 Earnings & Sales Estimates for SCHW
In the past seven days, the Zacks Consensus Estimate for second-quarter earnings has been revised marginally higher to $1.52 per share. The figure indicates a 33.3% rise from the year-ago quarter.
The consensus estimate for quarterly sales is pegged at $6.75 billion, which suggests a 15.4% increase from the prior-year quarter. Management expects second-quarter 2026 revenues to increase 16-17% year over year.
Other Finance Stocks Worth Betting on
Here are a couple of other finance stocks that you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases:
Zions Bancorporation ZION is scheduled to announce second-quarter 2026 results on July 20. The company carries a Zacks Rank #2 (Buy) at present and has an Earnings ESP of +0.53%.
Quarterly earnings estimates for Zions have been unchanged at $1.57 per share over the past week.
The Earnings ESP for Prosperity Bancshares PB is +1.76%, and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2026 results on July 29.
Over the past seven days, the Zacks Consensus Estimate for PB’s quarterly earnings has been unchanged at $1.54 per share.
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The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report
Prosperity Bancshares, Inc. (PB): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).