We keep our target at $118, applying a forward P/E of 21.4x our 2026 EPS view compared to the three-year forward historical average of 19.7x and the peer average of 19.3x. We are raising our 2025 EPS estimate by $0.27 to $4.79 and 2026's by $0.22 to $5.51 per share on revenue projections of $23.6B and $25.9B, respectively. We think SCHW merits a higher valuation given its dominant market position across client assets, RIA custody, and retail trading. Our investment thesis centers on accelerating multi-faceted growth: strengthening net new assets driven by the successful TD Ameritrade integration, deepening client relationships through expanded wealth and lending services, and strategic reinvestment in growth initiatives including spot crypto trading to capture younger demographics. With supplemental borrowing headwinds behind the company, management is executing a balanced capital allocation strategy of growth investment and shareholder returns, positioning the firm to capitalize on its market-leading franchise.

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