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Toronto Dominion Bank (TSE:TD)
TSX:TD
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Toronto Dominion Bank
(TSX:TD)
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Rating:75Outperform
Price Target:
C$127.00
▲(10.78% Upside)
TD Bank's overall stock score reflects strong earnings performance and attractive valuation, supported by positive technical indicators. While financial performance shows stability, concerns about leverage and cash flow warrant attention. The strategic focus on digital transformation and AI investments enhances growth prospects, despite macroeconomic challenges.
Positive Factors
Revenue Growth
The 10% year-over-year revenue growth reflects TD's ability to expand its market presence and enhance its service offerings, indicating strong demand for its financial products and services.
Strategic Digital Investments
The launch of TD AI Prism signifies a strategic move towards digital transformation, leveraging AI for personalized client experiences, which can drive long-term customer engagement and growth.
Strong Credit Performance
A decrease in impaired provisions for credit losses indicates strong credit risk management, enhancing the bank's financial stability and reducing potential future losses.
Negative Factors
High Leverage
High leverage can increase financial risk and limit flexibility, potentially impacting TD's ability to invest in growth opportunities and withstand economic downturns.
Declining Free Cash Flow
A decline in free cash flow growth can strain liquidity, limiting the bank's ability to fund operations, invest in new projects, and return capital to shareholders.
Increased Governance Costs
Rising governance and control costs can pressure margins and reduce profitability, necessitating careful management to ensure sustainable financial performance.
Toronto Dominion Bank (TD) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$194.67B
Dividend Yield3.66%
Average Volume (3M)7.93M
Price to Earnings (P/E)9.9
Beta (1Y)0.80
Revenue Growth7.92%
EPS Growth175.59%
CountryCA
Employees100,424
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.20
Shares Outstanding1,707,204,000
10 Day Avg. Volume6,413,302
30 Day Avg. Volume7,934,210
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.30
Enterprise Value/Revenue3.81
Enterprise Value/Gross Profit8.07
Enterprise Value/Ebitda17.44
Forecast
1Y Price Target
$113.81Price Target Upside-0.73% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Toronto Dominion Bank Business Overview & Revenue Model
Company DescriptionToronto Dominion Bank (TD) is one of the largest financial institutions in Canada, providing a wide range of banking and financial services to millions of customers. Established in 1855, TD operates in two main segments: Canadian Retail and Wholesale Banking. Its core products and services include personal banking, commercial banking, investment services, wealth management, and insurance. With a strong presence in both Canada and the United States, TD is dedicated to delivering customer-centric solutions and innovative financial products.
How the Company Makes MoneyTD generates revenue primarily through its diversified financial services. The main revenue streams include interest income from loans and mortgages, which constitute a significant portion of its earnings. Additionally, TD earns fees from financial advisory services, asset management, and brokerage services. The bank also benefits from transaction fees associated with credit card services and other retail banking operations. Partnerships with various financial technology firms enhance TD's service offerings and customer engagement, while its extensive branch network and digital banking capabilities ensure broad access to its products. Furthermore, TD's involvement in wholesale banking, including capital markets and corporate lending, contributes to its revenue stability and growth.
Toronto Dominion Bank Earnings Call Summary
Earnings Call Date:Aug 28, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Dec 04, 2025
Earnings Call Sentiment Neutral
TD Bank delivered strong financial performance with significant revenue growth and strategic achievements in Q3 2025. However, elevated expenses related to AML remediation and governance pose challenges. Despite increased impaired loans, the bank demonstrated resilience with a robust credit performance.Q3-2025 Updates
Positive Updates
Strong Earnings and Revenue Growth
TD Bank delivered a strong Q3 2025 with earnings of $3.9 billion and EPS of $2.20. Revenue grew 10% year-over-year driven by higher fee income and trading-related revenue.
Positive Operating Leverage
TD achieved positive operating leverage this quarter, reflecting strong revenue growth that offset elevated expenses.
Record Achievements in Canadian Banking
Canadian Personal and Commercial Banking delivered record revenue, earnings, deposits, and loan volumes. RESL volumes surpassed $400 billion.
Progress in U.S. Balance Sheet Restructuring
Significant progress was made in U.S. balance sheet restructuring with a 10% asset reduction target achieved, and the investment portfolio repositioning completed.
Launch of TD AI Prism
TD launched TD AI Prism to enhance client personalization and support growth through AI-driven insights.
Negative Updates
Elevated U.S. AML Remediation Costs
U.S. AML remediation costs were significant, with $500 million expected in fiscal 2025 and similar investments anticipated for fiscal 2026.
Higher Governance and Control Costs
Expenses increased 13% year-over-year, driven by governance and control costs, including investments in AML and other risk programs.
Increased Gross Impaired Loans
Gross impaired loans increased $468 million quarter-over-quarter, largely in the Wholesale Banking and U.S. Commercial Lending portfolios.
Challenges in U.S. Commercial Lending
Higher gross impaired loan formations were noted in the U.S. Commercial Lending portfolio, indicating credit challenges.
Company Guidance
During the TD Bank Group's Q3 2025 earnings call, the bank reported strong financial performance with earnings of $3.9 billion and earnings per share (EPS) of $2.20. The bank achieved a positive operating leverage, driven by a 10% revenue growth, which offset increased expenses related to governance, control costs, and business growth investments. Impaired provisions for credit losses (PCLs) decreased quarter-over-quarter, showcasing robust credit performance, and the bank added $600 million in reserves for policy and trade uncertainty. The Common Equity Tier 1 (CET1) ratio stood at 14.8% at the end of the quarter. Canadian Personal and Commercial Banking saw record revenue and loan volumes, with residential secured lending volumes surpassing $400 billion. U.S. retail banking exhibited core loan growth of 2% year-over-year, while U.S. bank card balances increased by 12%. The wealth management sector reported a 12% increase in total client assets, and wholesale banking generated over $2 billion in revenue for the third consecutive quarter. Additionally, TD Bank has been actively implementing a strategic relationship with Fiserv to streamline its portfolio and reduce costs, further enhancing financial performance.Toronto Dominion Bank Financial Statement Overview
Summary
Toronto Dominion Bank shows strong profitability and operational efficiency with healthy margins. However, negative revenue growth and high leverage are concerning. The declining free cash flow growth and low operating cash flow coverage ratio highlight potential liquidity risks, warranting close monitoring.Income Statement
The income statement shows a strong gross profit margin of 45.29% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 14.57% from 20.94% in 2023, reflecting reduced profitability. Revenue growth is negative at -1.38% TTM, which is concerning, but the EBIT and EBITDA margins remain healthy at 16.53% and 18.29% respectively, suggesting operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 4.98 TTM, indicating significant leverage, which could pose financial risks. However, the return on equity is strong at 14.73%, showing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.65
Positive
Cash Flow
Cash flow analysis indicates a significant decline in free cash flow growth at -40.58% TTM, which is a concern for liquidity. The operating cash flow to net income ratio is low at 0.19, suggesting potential cash flow challenges. However, the free cash flow to net income ratio remains robust at 0.93, indicating that the company is still generating sufficient cash relative to its net income.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 117.64B | 119.17B | 102.25B | 59.44B | 47.72B | 54.62B |
| Gross Profit | 55.50B | 52.00B | 48.59B | 44.70B | 42.49B | 36.04B |
| EBITDA | 25.67B | 12.86B | 14.80B | 22.19B | 19.20B | 14.05B |
| Net Income | 20.89B | 8.84B | 10.63B | 17.43B | 14.30B | 11.89B |
Balance Sheet | ||||||
| Total Assets | 2.04T | 2.06T | 1.96T | 1.92T | 1.73T | 1.72T |
| Cash, Cash Equivalents and Short-Term Investments | 245.26B | 230.49B | 6.72B | 179.68B | 209.50B | 273.88B |
| Total Debt | 629.12B | 460.66B | 401.81B | 374.04B | 256.76B | 40.96B |
| Total Liabilities | 1.91T | 1.95T | 1.84T | 1.81T | 1.63T | 1.62T |
| Stockholders Equity | 125.39B | 115.16B | 112.11B | 111.38B | 99.82B | 95.50B |
Cash Flow | ||||||
| Free Cash Flow | 17.24B | 52.76B | -67.15B | 37.49B | 49.00B | 228.35B |
| Operating Cash Flow | 19.46B | 54.94B | -65.30B | 38.95B | 50.13B | 229.61B |
| Investing Cash Flow | -8.88B | -45.42B | 76.23B | -31.89B | -45.27B | -223.32B |
| Financing Cash Flow | -12.32B | -9.81B | -12.85B | -4.82B | -5.04B | -4.75B |
Toronto Dominion Bank Technical Analysis
Positive
114.64
Price Trends
107.69
Positive
103.20
Positive
93.39
Positive
Market Momentum
1.80
Negative
63.91
Neutral
88.88
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TD, the sentiment is Positive. The current price of 114.64 is above the 20-day moving average (MA) of 112.18, above the 50-day MA of 107.69, and above the 200-day MA of 93.39, indicating a bullish trend. The MACD of 1.80 indicates Negative momentum. The RSI at 63.91 is Neutral, neither overbought nor oversold. The STOCH value of 88.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TD.
Toronto Dominion Bank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $107.20B | 14.05 | 13.40% | 3.37% | -0.39% | 20.28% | |
| ― | $59.22B | 14.67 | 13.25% | 2.98% | 9.25% | 0.34% | |
| ― | $194.67B | 9.86 | 17.36% | 3.66% | 7.92% | 175.59% | |
| ― | $287.39B | 15.68 | 14.60% | 2.96% | 3.48% | 17.81% | |
| ― | $125.86B | 15.53 | 10.20% | 3.67% | 1.78% | 32.32% | |
| ― | $113.19B | 17.11 | 8.64% | 5.56% | -2.54% | -6.66% | |
| ― | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
TSE:TD
Toronto Dominion Bank
114.64
41.36
56.44%
TSE:BMO
Bank Of Montreal
174.07
52.73
43.46%
TSE:BNS
Bank Of Nova Scotia
91.86
23.39
34.16%
TSE:CM
Canadian Bank of Commerce
115.25
30.92
36.67%
TSE:RY
Royal Bank Of Canada
204.12
39.60
24.07%
TSE:NA
National Bank of Canada
155.75
28.11
22.02%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.