Toronto Dominion Bank (TD) AI Stock Analysis

• Market Cap: C$212.67B
• Dividend Yield: 3.34%
• Average Volume (3M): 4.78M
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.70
• Revenue Growth: 3.07%
• EPS Growth: 144.41%
• Country: CA
• Employees: 100,424
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Diversified
• EPS (TTM): 2.18
• Shares Outstanding: 1,689,496,000
• 10 Day Avg. Volume: 4,223,072
• 30 Day Avg. Volume: 4,782,632
• PEG Ratio: -0.97
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 1.13
• P/FCF Ratio: 2.55
• 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$123.83
• Price Target Upside: -1.63% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 9.06
• Revenue Forecast (FY): C$57.85B

• Rating: 75 Outperform
• Price Target: C$127.00 ▲(0.89% Upside)

TD Bank's overall stock score reflects strong earnings performance and attractive valuation, supported by positive technical indicators. While financial performance shows stability, concerns about leverage and cash flow warrant attention. The strategic focus on digital transformation and AI investments enhances growth prospects, despite macroeconomic challenges.

Positive Factors

Revenue Growth

The 10% year-over-year revenue growth reflects TD's ability to expand its market presence and enhance its service offerings, indicating strong demand for its financial products and services.

Strategic Digital Investments

The launch of TD AI Prism signifies a strategic move towards digital transformation, leveraging AI for personalized client experiences, which can drive long-term customer engagement and growth.

Strong Credit Performance

A decrease in impaired provisions for credit losses indicates strong credit risk management, enhancing the bank's financial stability and reducing potential future losses.

Negative Factors

High Leverage

High leverage can increase financial risk and limit flexibility, potentially impacting TD's ability to invest in growth opportunities and withstand economic downturns.

Declining Free Cash Flow

A decline in free cash flow growth can strain liquidity, limiting the bank's ability to fund operations, invest in new projects, and return capital to shareholders.

Increased Governance Costs

Rising governance and control costs can pressure margins and reduce profitability, necessitating careful management to ensure sustainable financial performance.

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 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 Financial Statement Overview

Summary

Toronto Dominion Bank shows strong profitability and operational efficiency with healthy margins. However, negative revenue growth and high leverage are concerning. The declining free cash flow growth and low operating cash flow coverage ratio highlight potential liquidity risks. Overall, the financial health is stable but requires monitoring of leverage and cash flow trends.

Income Statement

The income statement shows a strong gross profit margin of 45.29% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 14.57% from 20.94% in 2023, reflecting reduced profitability. Revenue growth is negative at -1.38% TTM, which is concerning, but the EBIT and EBITDA margins remain healthy at 16.53% and 18.29% respectively, suggesting operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 4.98 TTM, indicating significant leverage, which could pose financial risks. However, the return on equity is strong at 14.73%, showing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.

Cash Flow

Cash flow analysis indicates a significant decline in free cash flow growth at -40.58% TTM, which is a concern for liquidity. The operating cash flow to net income ratio is low at 0.19, suggesting potential cash flow challenges. However, the free cash flow to net income ratio remains robust at 0.93, indicating that the company is still generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	117.64B	119.17B	102.25B	59.44B	47.72B	54.62B
Gross Profit	55.50B	52.00B	48.59B	44.70B	42.49B	36.04B
EBITDA	25.67B	12.86B	14.80B	22.19B	19.20B	14.05B
Net Income	20.89B	8.84B	10.63B	17.43B	14.30B	11.89B
Balance Sheet
Total Assets	2.04T	2.06T	1.96T	1.92T	1.73T	1.72T
Cash, Cash Equivalents and Short-Term Investments	245.26B	230.49B	116.51B	156.98B	194.67B	471.71B
Total Debt	629.12B	662.56B	568.66B	502.06B	400.86B	447.37B
Total Liabilities	1.91T	1.95T	1.84T	1.81T	1.63T	1.62T
Stockholders Equity	125.39B	115.16B	112.07B	111.38B	99.82B	95.50B
Cash Flow
Free Cash Flow	17.24B	52.76B	-67.15B	37.49B	49.00B	228.35B
Operating Cash Flow	19.46B	54.94B	-65.30B	38.95B	50.13B	229.61B
Investing Cash Flow	-8.88B	-45.42B	76.23B	-31.89B	-45.27B	-223.32B
Financing Cash Flow	-12.32B	-9.81B	-12.85B	-4.82B	-5.04B	-4.75B

Toronto Dominion Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 125.88
• 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 125.88 is above the 20-day moving average (MA) of 117.69, above the 50-day MA of 114.82, and above the 200-day MA of 98.80, indicating a bullish trend. The MACD of 2.59 indicates Negative momentum. The RSI at 82.40 is Negative, neither overbought nor oversold. The STOCH value of 95.46 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
NA	78 Outperform	$61.80B	15.30	13.53%	2.69%	7.50%	-5.28%
TD	75 Outperform	C$212.67B	10.88	16.78%	3.34%	3.07%	144.41%
RY	75 Outperform	$316.49B	16.03	15.28%	2.63%	2.13%	25.16%
CM	74 Outperform	$110.53B	14.30	13.69%	3.07%	-3.13%	18.22%
BNS	71 Outperform	$123.68B	17.14	9.19%	4.32%	-3.65%	-1.73%
BMO	69 Neutral	C$126.72B	15.60	10.10%	3.60%	-1.30%	20.41%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%