Charles Schwab 's compelling earnings growth makes the stock attractive in an uncertain investing environment, according to Goldman Sachs. Analyst Alexander Blostein upgraded the financial services name to buy from neutral. His price target of $100, up from $91, implies shares stand to gain nearly 26%. Shares, which are up 7.3% this year, added roughly 1.5% in premarket trading Friday following the upgrade. "In an environment that remains highly uncertain, SCHW offers one of the best EPS growth outlooks in our space," Blostein said in a note to clients. "While many pieces of the SCHW bull case have been in place for a while, we think the stock's recent results create enough evidence to underwrite much faster EPS growth." SCHW 1Y mountain SCHW stock performance over the past year. The analyst estimated that Charles Schwab's earnings per share will see compound annual growth of 25% through 2027, compared to 15% for brokers on average and 10% for the Financial Select SPDR Fund (XLF) . This estimate is supported by the firm's strong balance sheet, which Blostein says is driving mechanical net interest income acceleration and reducing risks from lower short-term rates. Charles Schwab is also building "excess capital" that should reach roughly $20 billion by the end of 2027, giving the firm capacity to ultimately begin share buybacks, Blostein said. Additionally, the analyst believes the stock is trading at an attractive level, consistent with its past three-year average in absolute terms and relative to the S & P 500. "Against an improving and increasingly durable fundamental jumping-off point, SCHW's valuation remains compelling," he said. "The stock is trading at 17X Consensus NTM P/E — in-line with the 3yr average despite current under-earning and closer proximity to the EPS acceleration." Analysts are mostly bullish on the stock. Of the 23 who cover it, 18 rate it a buy or strong buy, per LSEG. The average analyst price target also suggests about 10% upside. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
