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Toronto Dominion Bank (TSE:TD)
:TD
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Toronto Dominion Bank (TD) AI Stock Analysis

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TSE:TD

Toronto Dominion Bank

(NYSE:TD)

Rating:81Outperform
Price Target:
C$118.00
▲(12.37% Upside)
TD Bank's strong financial performance and strategic achievements in the latest earnings call are the most significant factors driving the score. The stock's attractive valuation and upward technical trend further support a positive outlook, although caution is advised due to potential short-term technical pullbacks and elevated expenses.
Positive Factors
Earnings
TD reported solid Q2 numbers with a better-than-expected US performance propelling a beat against forecast.
Strategic Initiatives
TD rolled out a restructuring program expected to reduce costs by $550-650M/year, with savings reinvested into growth areas of the business.
Negative Factors
Economic Environment
Management characterized the operating backdrop as one with a high degree of uncertainty, reflecting potential economic challenges.
Mortgage Portfolio
TD’s mortgage portfolio declined by 1% quarter-over-quarter, impacted by substantial repayment activity and low originations.

Toronto Dominion Bank (TD) vs. iShares MSCI Canada ETF (EWC)

Toronto Dominion Bank Business Overview & Revenue Model

Company DescriptionToronto Dominion Bank (TD) is one of the largest financial institutions in Canada, providing a wide range of banking and financial services to millions of customers. Established in 1855, TD operates in two main segments: Canadian Retail and Wholesale Banking. Its core products and services include personal banking, commercial banking, investment services, wealth management, and insurance. With a strong presence in both Canada and the United States, TD is dedicated to delivering customer-centric solutions and innovative financial products.
How the Company Makes MoneyTD generates revenue primarily through its diversified financial services. The main revenue streams include interest income from loans and mortgages, which constitute a significant portion of its earnings. Additionally, TD earns fees from financial advisory services, asset management, and brokerage services. The bank also benefits from transaction fees associated with credit card services and other retail banking operations. Partnerships with various financial technology firms enhance TD's service offerings and customer engagement, while its extensive branch network and digital banking capabilities ensure broad access to its products. Furthermore, TD's involvement in wholesale banking, including capital markets and corporate lending, contributes to its revenue stability and growth.

Toronto Dominion Bank Earnings Call Summary

Earnings Call Date:Aug 28, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Dec 04, 2025
Earnings Call Sentiment Neutral
TD Bank delivered strong financial performance with significant revenue growth and strategic achievements in Q3 2025. However, elevated expenses related to AML remediation and governance pose challenges. Despite increased impaired loans, the bank demonstrated resilience with a robust credit performance.
Q3-2025 Updates
Positive Updates
Strong Earnings and Revenue Growth
TD Bank delivered a strong Q3 2025 with earnings of $3.9 billion and EPS of $2.20. Revenue grew 10% year-over-year driven by higher fee income and trading-related revenue.
Positive Operating Leverage
TD achieved positive operating leverage this quarter, reflecting strong revenue growth that offset elevated expenses.
Record Achievements in Canadian Banking
Canadian Personal and Commercial Banking delivered record revenue, earnings, deposits, and loan volumes. RESL volumes surpassed $400 billion.
Progress in U.S. Balance Sheet Restructuring
Significant progress was made in U.S. balance sheet restructuring with a 10% asset reduction target achieved, and the investment portfolio repositioning completed.
Launch of TD AI Prism
TD launched TD AI Prism to enhance client personalization and support growth through AI-driven insights.
Negative Updates
Elevated U.S. AML Remediation Costs
U.S. AML remediation costs were significant, with $500 million expected in fiscal 2025 and similar investments anticipated for fiscal 2026.
Higher Governance and Control Costs
Expenses increased 13% year-over-year, driven by governance and control costs, including investments in AML and other risk programs.
Increased Gross Impaired Loans
Gross impaired loans increased $468 million quarter-over-quarter, largely in the Wholesale Banking and U.S. Commercial Lending portfolios.
Challenges in U.S. Commercial Lending
Higher gross impaired loan formations were noted in the U.S. Commercial Lending portfolio, indicating credit challenges.
Company Guidance
During the TD Bank Group's Q3 2025 earnings call, the bank reported strong financial performance with earnings of $3.9 billion and earnings per share (EPS) of $2.20. The bank achieved a positive operating leverage, driven by a 10% revenue growth, which offset increased expenses related to governance, control costs, and business growth investments. Impaired provisions for credit losses (PCLs) decreased quarter-over-quarter, showcasing robust credit performance, and the bank added $600 million in reserves for policy and trade uncertainty. The Common Equity Tier 1 (CET1) ratio stood at 14.8% at the end of the quarter. Canadian Personal and Commercial Banking saw record revenue and loan volumes, with residential secured lending volumes surpassing $400 billion. U.S. retail banking exhibited core loan growth of 2% year-over-year, while U.S. bank card balances increased by 12%. The wealth management sector reported a 12% increase in total client assets, and wholesale banking generated over $2 billion in revenue for the third consecutive quarter. Additionally, TD Bank has been actively implementing a strategic relationship with Fiserv to streamline its portfolio and reduce costs, further enhancing financial performance.

Toronto Dominion Bank Financial Statement Overview

Summary
Toronto Dominion Bank maintains a strong financial position with impressive profitability and operational efficiency as shown in the income statement. The balance sheet reflects a stable capital structure with a strong equity base, although leverage remains high. Cash flow analysis indicates effective cash generation despite recent declines in free cash flow growth. Overall, the bank is financially robust, but should monitor leverage and cash flow trends closely to maintain stability.
Income Statement
85
Very Positive
The Toronto Dominion Bank demonstrates strong financial performance in the TTM (Trailing-Twelve-Months) with a gross profit margin of 45.3% and a net profit margin of 14.6%, indicating efficient cost management and solid profitability. The revenue growth rate from 2024 to 2025 was modest at 0.1%, suggesting stable yet slow revenue expansion. The EBIT margin stands at 16.5%, and the EBITDA margin is 18.3%, both reflecting strong operational efficiency. Overall, the income statement highlights robust profitability and operational efficiency despite limited revenue growth.
Balance Sheet
78
Positive
The balance sheet shows a solid equity position with a debt-to-equity ratio of 4.98, indicating a high level of leverage, which is typical in the banking sector but also a potential risk factor. The return on equity (ROE) is a healthy 13.8%, demonstrating effective use of equity to generate profits. The equity ratio of 6.1% suggests a stable capital structure, although there is room for improvement in reducing leverage. Overall, the balance sheet reflects a strong equity base but highlights the need for careful management of high debt levels.
Cash Flow
80
Positive
The cash flow statement reveals strong cash generation capabilities with an operating cash flow to net income ratio of 1.80, indicating robust cash generation relative to reported earnings. The free cash flow growth rate from 2024 to 2025 is -45.0%, reflecting a significant decline, primarily due to fluctuations in operating cash flow. The free cash flow to net income ratio is 1.67, showcasing solid cash conversion from profits. Despite the decline in free cash flow growth, the cash flow position remains strong, emphasizing the bank's ability to generate cash efficiently.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue119.28B119.17B102.25B59.44B47.72B54.62B
Gross Profit54.03B52.00B48.59B44.70B42.49B36.04B
EBITDA21.82B12.86B14.80B22.19B19.20B14.05B
Net Income17.38B8.84B10.63B17.43B14.30B11.89B
Balance Sheet
Total Assets2.06T2.06T1.96T1.92T1.73T1.72T
Cash, Cash Equivalents and Short-Term Investments648.32B568.21B6.72B179.68B209.50B273.88B
Total Debt627.71B460.66B401.81B374.04B256.76B40.96B
Total Liabilities1.94T1.95T1.84T1.81T1.63T1.62T
Stockholders Equity126.09B115.16B112.11B111.38B99.82B95.50B
Cash Flow
Free Cash Flow29.01B52.76B-67.15B37.49B49.00B228.35B
Operating Cash Flow31.23B54.94B-65.30B38.95B50.13B229.61B
Investing Cash Flow-20.10B-45.42B76.23B-31.89B-45.27B-223.32B
Financing Cash Flow-11.95B-9.81B-12.85B-4.82B-5.04B-4.75B

Toronto Dominion Bank Technical Analysis

Technical Analysis Sentiment
Positive
Last Price105.01
Price Trends
50DMA
100.71
Positive
100DMA
94.47
Positive
200DMA
86.72
Positive
Market Momentum
MACD
0.91
Negative
RSI
69.69
Neutral
STOCH
77.56
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 105.01 is above the 20-day moving average (MA) of 101.89, above the 50-day MA of 100.71, and above the 200-day MA of 86.72, indicating a bullish trend. The MACD of 0.91 indicates Negative momentum. The RSI at 69.69 is Neutral, neither overbought nor oversold. The STOCH value of 77.56 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

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
C$182.33B10.7814.27%3.97%13.12%61.99%
77
Outperform
$86.22B14.7110.20%3.79%15.63%66.95%
68
Neutral
$17.84B12.0310.32%3.73%9.70%0.76%
$76.80B15.928.64%4.97%
$68.94B12.6913.19%3.64%
$194.12B15.1014.60%2.93%
$42.77B14.2813.42%3.12%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:TD
Toronto Dominion Bank
105.01
28.66
37.53%
BMO
Bank Of Montreal
119.11
39.85
50.28%
BNS
Bank Of Nova Scotia
61.73
15.32
33.01%
CM
Canadian Bank of Commerce
75.28
20.21
36.70%
RY
Royal Bank Of Canada
145.26
30.07
26.10%
NTIOF
National Bank of Canada
105.08
15.36
17.12%

Toronto Dominion Bank Corporate Events

Executive/Board Changes
TD Bank Group Appoints New Global Head of Financial Crime Risk Management
Positive
Jan 23, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 28, 2025