Toronto Dominion Bank (TSE:TD) (NYSE:TD), a bank stock more commonly known as TD Bank, rolled out its earnings report earlier today, and by all accounts, the news was good. As a result, shares gained fractionally in Thursday afternoon’s trading.
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TD Bank posted a first-quarter profit of C$2.82 billion, which was up against last year’s figure of C$1.58 billion. On a per-share basis, that equates to C$1.55 per share this year versus C$0.82 per share last year. Revenue was also on the rise, with the C$13.71 billion posted this year overmatching the C$12.2 billion realized a year ago.
Uncertainty and Concern
It wasn’t all good news for TD Bank, however. Reports noted that TD Bank’s provision for credit losses was on the rise, going from C$690 million a year prior to C$1 billion this year. Someone expects some losses in the future, and that, potentially, is a problem. In addition, adjusted earnings per share came in at C$2.00, compared with C$2.23 in the prior year. This equates to an adjusted net income of C$3.64 billion versus C$4.15 billion. While this did beat estimates of C$1.93 per share, it’s still a slowdown.
Meanwhile, there’s some uncertainty around TD Bank right now, as there’s talk of a new CEO coming in. No one’s sure just who will be gunning for the top slot, and reports note that succession plans have been in the making since at least late 2023. But that level of uncertainty may prove troubling to investors, who might see it as a sinking ship.
Is TD a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TD stock based on four Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 4.28% loss in its share price over the past year, the average TD price target of C$88.80 per share implies 9.66% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
