The commissions war is escalating

A week after Interactive Brokers announced a no-fee platform, Charles Schwab and TD Ameritrade followed suit, reducing their stock and ETF commissions to $ 0.

Following the decision of the last two companies, the shares of online brokers have suffered serious losses in the next round of "Commission War".

What does this mean for brokers? Bank of America analysts have already lowered their forecasts for TD Ameritrade, reducing the price target for their shares and their performance. Tougher competitive conditions and lower interest rates will blow strong headwinds against the company.

The BOA rating is now Underperform with a $ 39 target for TD, a buy rating and a $ 41 target for E-Trade and a neutral rating with a $ 42 target for Shwab.

Analysts at Patrick O'Shaughnessy comment that investors need to understand that the era of trading commissions is over. They predict that E * Trade Financial will also follow the example of others.

Patrick posted an outperform rating and $ 55 target for TD, an outperform target of $ 50 for E-Trade, and an outperform $ 42 target for Schwab.

Wells Fargo commented that despite the potential negative EPS after the reduction in commissions, the decline in brokerage stocks is not significant. At this stage, they refrain from selling because the movements are already lost.

UBS upgraded their buy rating to $ 40 for TD, sell, and $ 33 for Schwab. Barclays advised investors to avoid the stock of online brokers at this stage. They have a downgrade rating to TD of $ 31, an underweight rating of E-Trade to $ 31, and an underweight of $ 34 to Schwab.

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