On Wednesday, San Francisco-based Charles Schwab Corp. (SCHW) announced its expansion plan.
The company entered into a strategic alliance with Broadridge Financial Solutions Inc. (BR) with an intention to expand its global investing offerings.
The terms of the agreement were not disclosed.
New York-based Broadridge Financial Solutions provides securities transaction processing, clearing and settlement services to retail and institutional brokerage firms, global banks, mutual funds, annuity companies, institutional investors, specialty trading firms, and clearing firms, as well as to corporate issuers.
After the completion of the collaboration, Charles Schwab aims to launch multicountry and multicurrency offerings in the first quarter of 2012, through which the company’s clients will be able to trade in 12 markets and 8 currencies. Moreover, Broadridge will come up with technology support needed in currency trade processing, accounting and reporting.
Since the launch of over-the-counter foreign stocks trading by Charles Schwab, clients have significantly grown by more than 300% in the first quarter of 2011 over the prior year. At the current level, Charles Schwab offers country and sector-based research for investors, and plans to introduce global currency and macro-economic commentary from its own advisers and third-party experts. Furthermore, the company intends to offer customer service and provide support to clients for trading internationally in both equities and currencies.
Through this deal, Charles Schwab will help its clients in their portfolio enhancement as well as in succeeding globally through long-term investments. Furthermore, Broadridge’s technological support and BPO operations will act as a catalyst in facilitating clients and helping Charles Schwab to establish its footprint globally in the investment trading arena.
Estimate Revision Trends
Charles Schwab is expected to release its second-quarter 2011 earnings on July 18, 2011. Over the last 30 days, nine out of the 17 analysts covering Charles Schwab have lowered their estimates for the second quarter, while none moved in the opposite direction. Furthermore, for 2011, seven out of the 15 analysts have lowered their estimates, while no upward revision was witnessed over the last 30 days.
Currently, the Zacks Consensus Estimate for the second quarter is operating earnings of 20 cents per share, an increase of 16.3% from the year-ago quarter. Furthermore, over the last 30 days, operating earnings estimates for the second quarter of 2011 and 2011 remained stable.
Charles Schwab currently retains its Zacks #4 Rank, which translates to a short-term ‘Sell’ rating. Moreover, considering the fundamentals we maintained our long-term “Underperform” recommendation on the stock.
BROADRIDGE FINL (BR): Free Stock Analysis Report
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