Toronto Dominion Bank (TD) AI Stock Analysis

• Market Cap: $151.05B
• Dividend Yield: 4.97%
• Average Volume (3M): 6.17M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.90
• Revenue Growth: 11.78%
• EPS Growth: -25.44%
• Country: CA
• Employees: 100,424
• Sector: Financial
• Sector Strength: 82
• Industry: Banks - Diversified
• EPS (TTM): 4.72
• Shares Outstanding: 1,751,700,000
• 10 Day Avg. Volume: 8,272,009
• 30 Day Avg. Volume: 6,174,619
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.82
• Price to Cash Flow (P/CF): 0.50
• P/FCF Ratio: 0.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$90.22
• Price Target Upside: 6.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

Toronto Dominion Bank's strong revenue growth and solid balance sheet are key strengths, supported by strategic restructuring and a robust capital position. However, the stock faces challenges with declining operational cash flow and economic uncertainties impacting credit provisions. A moderately attractive valuation and positive dividend yield offer additional incentives for investors. The recent executive appointment further strengthens risk management, which is crucial given ongoing AML remediation efforts.

Positive Factors

Earnings

Wealth & Insurance earnings significantly exceeded expectations due to market appreciation and higher premiums.

Financial Position

Strong capital levels and liquidity with a CET1 ratio of 13.1%, highlighting a robust financial position.

Negative Factors

Operating Leverage

Despite a 9% increase in revenue, expenses grew by 12%, leading to negative operating leverage of -3.0%.

Performance

Canadian Personal & Commercial results were below expectations due to slightly lower volume growth and net interest margin.

Toronto Dominion Bank Business Overview & Revenue Model

Company Description

The Toronto-Dominion Bank, together with its subsidiaries, provides various financial products and services in Canada, the United States, and internationally. It operates through three segments: Canadian Retail, U.S. Retail, and Wholesale Banking. The company offers personal deposits, such as chequing, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; and financing options to customers at point of sale for automotive and recreational vehicle purchases. It also provides credit cards and payments; real estate secured lending, auto finance, and consumer lending services; point-of-sale payment solutions for large and small businesses; wealth and asset management products, and advice to retail and institutional clients through direct investing, advice-based, and asset management businesses; and property and casualty insurance, as well as life and health insurance products. The company also provides capital markets, and corporate and investment banking products and services, including underwriting and distribution of new debt and equity issues; advice on strategic acquisitions and divestitures; and trading, funding, and investment services to corporations, governments, and institutions. It offers its products and services under the TD Bank and America's Most Convenient Bank brand names. The company operates through a network of 1,061 branches and 3,381 automated teller machines (ATMs) in Canada, and 1,148 stores and 2,701 ATMs in the United States, as well as offers telephone, digital, and mobile banking services. It has a strategic alliance with Canada Post Corporation. The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

How the Company Makes Money

TD makes money primarily through its diversified financial services. The bank's revenue streams include net interest income, which is generated from the difference between the interest earned on loans and the interest paid on deposits. Additionally, TD earns non-interest income through fees for services such as account maintenance, transaction processing, and wealth management advisory. The bank's wealth management and insurance divisions also contribute significantly to its earnings, offering investment products and insurance policies to individuals and businesses. Moreover, TD benefits from strategic partnerships and its strong presence in both Canadian and U.S. markets, which enhances its cross-border banking capabilities and expands its customer base. Capital markets activities, such as trading and underwriting, provide additional income sources. Overall, TD's comprehensive range of financial products and services, alongside its geographic diversification, are key factors in its revenue generation.

Toronto Dominion Bank Financial Statement Overview

Summary

Toronto Dominion Bank demonstrates strong revenue growth and a solid balance sheet with significant reductions in debt, supporting financial stability. However, the decline in net income growth and operating cash flow could pose challenges in sustaining long-term profitability and liquidity. The bank needs to address these areas while leveraging its strong equity position.

Income Statement

The income statement shows a consistent upward trend in total revenue, with a TTM (Trailing-Twelve-Months) revenue of $57.2 billion, up from $55.9 billion in the previous year. However, the net income has slightly decreased to $8.81 billion from $8.84 billion, indicating a slight compression in profitability. The gross profit margin remains robust at 100% as expected for a bank, but the net profit margin has slightly decreased. The EBIT margin decreased from previous periods, while the EBITDA margin shows slight improvement. Overall, revenue growth is strong, but net income growth is slightly stagnating.

Balance Sheet

The balance sheet reflects strong equity with stockholders' equity at $119 billion, and a low Debt-to-Equity ratio given the banking industry standards. The Total Debt has significantly decreased from $460.7 billion to $52.7 billion in the TTM period, which enhances financial stability. The equity ratio is strong, reflecting solid capital management. Overall, the bank's balance sheet is robust with a strong equity base and reduced debt levels.

Cash Flow

The cash flow analysis indicates a decrease in operating cash flow from $54.9 billion to $29.3 billion in the TTM period, which raises concerns about short-term liquidity. Free cash flow has also declined, impacting the free cash flow to net income ratio. However, the bank is managing capital expenditures efficiently. Overall, while cash flow generation has weakened, it remains positive, but the declining trend warrants attention.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
57.20B	55.95B	51.48B	45.76B	42.27B	43.28B
	Gross Profit
57.20B	55.95B	52.93B	45.76B	42.27B	43.28B
	EBIT
15.39B	20.67B	15.76B	35.09B	17.92B	13.05B
	EBITDA
16.92B	22.69B	15.00B	22.19B	19.20B	14.05B
	Net Income Common Stockholders
8.81B	8.84B	10.78B	17.43B	14.30B	11.89B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
54.13B	230.49B	6.72B	179.68B	209.50B	273.88B
	Total Assets
621.04B	2.06T	1.96T	1.92T	1.73T	1.72T
	Total Debt
12.51B	460.66B	401.81B	374.04B	256.76B	40.96B
	Net Debt
-9.20B	282.64B	296.74B	228.19B	90.87B	-129.63B
	Total Liabilities
577.24B	1.95T	1.84T	1.81T	1.63T	1.62T
	Stockholders Equity
42.30B	115.16B	112.11B	111.38B	99.82B	95.50B
Cash Flow		Free Cash Flow
27.06B	52.76B	-67.15B	37.49B	49.00B	230.03B
	Operating Cash Flow
29.27B	54.94B	-39.81B	38.95B	50.13B	231.79B
	Investing Cash Flow
-72.81B	-45.42B	76.23B	-31.89B	-45.27B	-224.12B
	Financing Cash Flow
43.41B	-9.81B	-38.33B	-4.82B	-5.04B	-6.13B

Toronto Dominion Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 84.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TD, the sentiment is Positive. The current price of 84.89 is below the 20-day moving average (MA) of 85.43, above the 50-day MA of 84.60, and above the 200-day MA of 79.25, indicating a bullish trend. The MACD of 0.69 indicates Negative momentum. The RSI at 55.71 is Neutral, neither overbought nor oversold. The STOCH value of 63.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TD.

Toronto Dominion Bank Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMO	77 Outperform	$70.04B	12.39	10.01%	4.71%	15.63%	66.95%
TD	76 Outperform	$151.05B	18.27	7.68%	4.97%	11.78%	-25.44%
Sector *	63 Neutral	$14.35B	9.94	8.94%	4.37%	16.34%	-11.76%

Toronto Dominion Bank Corporate Events

TD Bank Group Appoints New Global Head of Financial Crime Risk Management

TD Bank Group has appointed Jacqueline Sanjuas as the new Global Head of Financial Crime Risk Management, succeeding Herb Mazariegos. With over 20 years of experience in compliance and risk management, Ms. Sanjuas has been instrumental in enhancing the bank’s U.S. anti-money laundering program since joining TD in January 2024. These leadership changes are expected to strengthen TD’s efforts in financial crime risk management across its global operations.

TD Bank Group Accelerates CEO Transition and Announces Board Renewal

TD Bank Group has announced an accelerated transition of its CEO position, with Raymond Chun set to take over as Group President and CEO on February 1, 2025, ahead of the initially planned date. This transition comes as part of a broader strategy and operational review initiated by Chun, who is currently the Chief Operating Officer. The transition also includes Bharat Masrani stepping down, although he will continue to support the transition in an advisory capacity. Concurrently, the bank is undergoing a significant renewal of its board of directors, including the adoption of new term limits and the retirement of five directors in 2025. Four new directors with extensive experience in global banking and governance will be proposed for election, signaling a strategic shift in the bank’s governance structure and leadership approach.

TD Bank Group Announces EUR 750 Million Subordinated Notes Offering

TD Bank Group announced a public offering of EUR 750 million in Fixed Rate Reset Subordinated Notes, classified as Non-Viability Contingent Capital. These Notes, intended to qualify as Tier 2 capital, will help the bank in its general corporate activities, including potential redemption of existing securities. The issuance, managed by Barclays, Commerzbank, Deutsche Bank, Natixis, and TD Securities, highlights the bank’s strategic financial maneuvers to strengthen its capital base and maintain its competitive positioning within the financial industry.