In a move that proves that, sometimes, even good news is not enough for shareholders, Canadian banking chain Toronto Dominion Bank (TSE:TD) landed an upgrade at BMO Capital. But despite that, shares still slid fractionally in Thursday morning’s trading.
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While TD Bank is currently trading around its low for the last 52 weeks, it still managed to get an upgrade at BMO Capital. Analyst Sohrab Movahedi upgraded shares from Market Perform to Outperform, and also established a new price target of C$90 per share.
Movahedi noted that the upgrade might be a little early in coming, but noted there was a “…3-to-1 upside / downside skew” in the current numbers. That was more than enough to catch Movaheadi’s attention, and also noted that there was “…an attractive dividend yield…” at hand, though “some patience may be required” to get the most out of it. Essentially, while there were some “distractions” in play, Movahedi expected the bank to deliver “…peer-like performance…” overall.
Trouble Ahead?
While Movahedi’s assertions seem sound, not everyone is so convinced. A report from Baystreet asked “Is TD Bank stock in trouble?” and proceeded to spell out a few reasons why that may be the case. A recent share price decline of around 11% coupled with significant “…investor concerns over financial and operational headwinds” did not help matters.
However, Baystreet urged perspective, noting that the recent share price losses may represent a buying opportunity on the hoof, and noted further: “Bad press or not, TD is still likely to be a cornerstone of the Canadian banking sector for decades to come.”
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 5.89% loss in its share price over the past year, the average TD price target of C$84.22 per share implies 12.78% upside potential.
