TD Bank Q3 Earnings Preview: What to Expect

Toronto-Dominion Bank (TD), Canada’s largest bank, will report Q3 earnings on August 26 before the opening bell.

Over the past year, the bank stock has jumped by approximately 35%, and is currently trading over C$85. Solid earnings could propel shares of TD higher, so let’s have a look at what analysts are expecting. (See Toronto-Dominion Bank stock charts on TipRanks)

Analysts on average expect TD to post adjusted earnings of C$1.90 per share in Q3 2021, representing a growth of 52% from the prior-year quarter (C$1.25 per share). The estimated revenue is C$10.1 billion, indicating a decrease from the third quarter of 2020 (C$10.5 billion). TD beat EPS estimates in the past three quarters.

Points to Watch

Lower credit demand in Q3, combined with low interest rates, have likely hurt the growth of the company’s net interest income.

As global M&A volumes have increased, advisory fees should have been positively impacted. Toronto-Dominion’s trading revenues were likely weak in the third quarter due to reduced market volatility.

With more people getting vaccinated, an improving macroeconomic situation, and support from the government and central bank, this should be another quarter of reserve releases for the Canadian bank.

On August 17, Scotiabank analyst Meny Grauman reiterated a Hold rating on TD while lowering its price target to C$94.00 (from C$95.00). This implies 7.9% upside potential.

Overall, TD scores a Hold rating among Wall Street analysts based on one Buy, six Holds, and one Sell. The average TD price target of C$91.81 implies 6.4% upside potential to current levels.

TipRanks’ Smart Score

TD scores a 6 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns are likely to perform in line with the overall market.