So, there is good news today, of a sort, about Toronto Dominion Bank (TSE:TD). No, it is not about the class action lawsuit that just got kicked up. Nor is it about senators suddenly discovering money laundering. The good news came from Jefferies analysts, who declared that all the bad news about TD Bank is priced in. That gave investors some hope, and shares notched up fractionally in Thursday morning’s trading.
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The word from Jefferies analyst John Aiken nudged the price target up from its original $82 to a current $90 per share. Further, Aiken upgraded TD Bank shares to a Buy. Essentially, Aiken declared that all the bad news TD Bank has seen lately—that put the stock into a significant decline—has pretty much cleared up for the most part. Now, there is room for upside potential once more, especially among competitors in the field who did not have nearly so much bad news to their credit.
Further, in a note to investors, Aiken said: “As the year progresses, we anticipate that its multiple will recover some lost ground and further upside is available should it demonstrate any incremental earnings growth.” Moreover, the problems that TD Bank has already seen are not the kind of thing that would “…disrupt…operations at a client level.” Even the asset cap that regulators threw in “…does not necessarily preclude growth in [TD’s] U.S. retail banking segment.”
Looking to Restaurants
Separately, TD Bank also released the results of a study about the use of apps and artificial intelligence (AI) technology in restaurants. What it found was surprising, to say the least, and represents some serious potential changes afoot in the restaurant industry.
It may surprise you, but there is renewed optimism in the restaurant industry. The growth of digital ordering—including mobile ordering—as well as shifting menus and growing expectations for artificial intelligence, are spurring restaurants to see a brighter future ahead. More specifically, 60% believe that an increase in foot traffic will have the “greatest impact” on the restaurant industry in the next 12 months. Lower interest rates was also a factor of 46%, while the use of AI and automation systems was a factor for 42%.
Is TD a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TD stock based on three Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 2.81% loss in its share price over the past year, the average TD price target of C$84.22 per share implies 10.31% upside potential.
