Toronto Dominion Bank (TD) AI Stock Analysis

• Market Cap: $165.22B
• Dividend Yield: 4.39%
• Average Volume (3M): 7.24M
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.89
• Revenue Growth: 13.12%
• EPS Growth: 61.99%
• Country: CA
• Employees: 100,424
• Sector: Financial
• Sector Strength: 81
• Industry: Banks - Diversified
• EPS (TTM): 1.97
• Shares Outstanding: 1,751,700,000
• 10 Day Avg. Volume: 5,542,965
• 30 Day Avg. Volume: 7,239,010
• PEG Ratio: N/A
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.01
• 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: $96.10
• Price Target Upside: 1.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 79 Outperform
• Price Target: C$107.00 ▲(13.44%Upside)

TD Bank shows overall strong financial performance with robust revenue growth and a solid balance sheet. Technical indicators are positive, reflecting bullish momentum. Valuation is appealing, with a favorable P/E ratio and dividend yield. The earnings call highlights both strong earnings and challenges from restructuring and macroeconomic factors. The stock is well-positioned, but close monitoring is advised given potential headwinds.

Positive Factors

Cost Management

TD rolled out a restructuring program expected to reduce costs by ~$550-650M/year, with savings reinvested into growth areas of the business.

Earnings Performance

Shares of TD Bank outperformed peers after reporting better than expected earnings driven by strong performance in US Retail and Wholesale Banking.

Leadership and Strategy

New leadership's actions led by CEO Raymond Chun should lead to a more profitable and focused TD, driving superior shareholder returns.

Negative Factors

Earnings Contribution

The sale of TD's stake in Schwab has resulted in a significant decrease in earnings contribution to TD's second quarter, with a decline of approximately 68% from the previous quarter.

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 in Q2, impacted by substantial repayment activity and low originations.

Toronto Dominion Bank Business Overview & Revenue Model

Company Description

Toronto Dominion Bank (TD), one of Canada's largest financial institutions, offers a broad range of financial products and services to over 26 million customers worldwide. Operating in sectors such as personal banking, commercial banking, wealth management, and wholesale banking, TD is recognized for its focus on delivering a superior customer experience through its extensive network of branches and digital platforms. With a strong presence in Canada and the United States, TD continues to expand its reach through strategic acquisitions and partnerships.

How the Company Makes Money

TD Bank makes money primarily through a diversified revenue model that includes interest income, non-interest income, and wealth management fees. Interest income is generated from lending activities, including personal loans, mortgages, and credit cards, where the bank earns interest on the money it lends. Non-interest income comes from various sources such as service fees, trading income, and insurance premiums. Wealth management and investment services provide another significant revenue stream, earning fees and commissions on assets under management and advisory services. Additionally, TD benefits from strategic partnerships and joint ventures, contributing to its earnings through expanded service offerings and market reach.

Toronto Dominion Bank Financial Statement Overview

Summary

The financial performance is solid with strong revenue growth and a robust balance sheet, highlighted by significant debt reduction. However, challenges include stagnating net income growth and declining operating cash flow, which could impact long-term profitability and liquidity.

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
120.11B	119.17B	51.48B	45.76B	42.27B	43.28B
	Gross Profit
53.05B	52.00B	52.93B	45.76B	42.27B	43.28B
	EBIT
10.77B	10.83B	15.76B	35.09B	17.92B	13.05B
	EBITDA
12.83B	12.86B	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
220.19B	230.49B	6.72B	179.68B	209.50B	273.88B
	Total Assets
1.93T	2.06T	1.96T	1.92T	1.73T	1.72T
	Total Debt
421.31B	460.66B	401.81B	374.04B	256.76B	40.96B
	Net Debt
270.95B	282.64B	296.74B	228.19B	90.87B	-129.63B
	Total Liabilities
1.82T	1.95T	1.84T	1.81T	1.63T	1.62T
	Stockholders Equity
111.84B	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: 94.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 94.32 is above the 20-day moving average (MA) of 89.59, above the 50-day MA of 86.09, and above the 200-day MA of 80.66, indicating a bullish trend. The MACD of 2.12 indicates Negative momentum. The RSI at 78.63 is Negative, neither overbought nor oversold. The STOCH value of 89.64 is Negative, 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
TD	79 Outperform	$165.22B	9.77	14.27%	4.39%	13.12%	61.99%
CM	79 Outperform	$88.88B	12.24	13.23%	3.93%	10.79%	18.20%
RY	78 Outperform	C$251.25B	14.46	14.39%	3.24%	11.51%	14.79%
NA	78 Outperform	$50.53B	11.76	15.64%	3.42%	17.13%	14.73%
BMO	71 Outperform	$103.97B	13.42	10.01%	4.33%	10.57%	50.35%
BNS	71 Outperform	$90.81B	14.72	8.00%	5.83%	3.72%	-17.99%
Sector *	64 Neutral	$12.67B	9.74	7.58%	17015.08%	12.21%	-6.96%

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.