One of the strangest things about Canadian news lately is how many businesses declared earnings and suffered for it regardless. Today, Canadian bank stock TD Bank (TSE:TD) broke the streak, bringing out an earnings report that featured several wins, and having investors respond in an upbeat fashion. In fact, shares notched up fractionally in Thursday morning’s trading.
Reports noted that analysts were looking for TD Bank to pull in C$1.95 per share on average. TD Bank beat that figure handily by posting earnings of C$2.02. Plus, its earnings for the wealth management and insurance unit also came in ahead of analyst expectations. Analysts were looking for C$578 million, but TD Bank brought in C$680 million instead, a clear victory.
And, in what might have been the best news, TD Bank revealed its provisions for credit losses came in at C$1.21 billion, almost an exact match for the C$1.19 billion analysts believed would be the case. Most Canadian banks are firing up their bad loan provisions, as tariffs from the United States cause uncertainty in the broader market.
A Big New Hire
But this was not all the news that TD Bank had to offer today. A Reuters report noted that TD Bank brought in a new “compliance monitor” for anti-money laundering operations in the form of Guidepost Solutions. TD Bank took $3 billion in penalties last year following issues of money laundering protections, and the hire is designed to help prevent a bill like that from ever hitting again.
Guidepost is being tasked with TD Bank’s United States operations, fixing problems that are currently in the system as well as strengthening other key points to prevent problems from cropping up in the future. TD Bank has a $500 million fund set aside to power operations like this, and from that fund, Guidepost will be paid, the report noted.
Is TD a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:TD stock based on five Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 12.77% rally in its share price over the past year, the average TSE:TD price target of C$87.93 per share implies 2.11% upside potential.
