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Charles Schwab Falls; Goldman Cuts to Neutral, Partly on Valuation

Goldman analysts downgraded Charles Schwab stock to neutral and removed it from its Americas conviction list.

Charles Schwab  (SCHW) - Get Charles Schwab Corporation Report shares on Thursday were lower after analysts at Goldman Sachs downgraded the wealth management firm to neutral from buy and removed its from its Americas conviction list. 

The investment firm said that while second-quarter retail trading activity was "robust," engagement was down from the first quarter, leading to a decline in retail volumes of about 30%.

The firm also said that Schwab's valuation isn't attractive as the shares have notched closer to Goldman Sachs's $76 price target. 

Schwab could be valued at more than $100 over time, Goldman analyst Will Nance said, but its near-term upside is limited. 

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Charles Schwab shares at last check were down 3.1% to $67.92. The stock is up more than 30% year to date and has more than doubled over the past 12 months.

Last week, the company said it was cooperating with an investigation by the Securities and Exchange Commission into the company’s Schwab Intelligent Portfolios digital advisory business.

The company said it would record a "liability and related nondeductible charge" of $200 million in the second quarter. 

The company has been cooperating with SEC staff in the investigation and is evaluating its options," Charles Schwab said in a regulatory filing. 

In April, the firm said it was looking closely at offering cryptocurrency, but it wanted more clarity from regulators before it proceeded.