Toronto Dominion Bank (TD) AI Stock Analysis

• Market Cap: $176.38B
• Dividend Yield: 4.17%
• Average Volume (3M): 7.14M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.84
• Revenue Growth: 13.12%
• EPS Growth: 61.99%
• Country: CA
• Employees: 100,424
• Sector: Financial
• Sector Strength: 77
• Industry: Banks - Diversified
• EPS (TTM): 1.97
• Shares Outstanding: 1,751,700,000
• 10 Day Avg. Volume: 12,355,002
• 30 Day Avg. Volume: 7,139,132
• PEG Ratio: 0.09
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.88
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $97.34
• Price Target Upside: -3.32% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 79 Outperform
• Price Target: C$112.00 ▲(11.23%Upside)

Toronto Dominion Bank's overall stock score is driven primarily by its strong financial performance and attractive valuation. The bank's profitability and operational efficiency are significant strengths, but the high leverage and recent decline in free cash flow growth warrant caution. Technical indicators suggest bullish momentum, although the stock appears overbought. The earnings call provides a balanced view, highlighting robust earnings and strategic investments, yet acknowledging macroeconomic challenges and restructuring costs.

Positive Factors

Earnings and Financial Performance

Shares of TD Bank outperformed peers after reporting better than expected earnings driven by strong performance in US Retail and Wholesale Banking.

Leadership and Strategic Direction

New leadership's actions led by CEO Raymond Chun should lead to a more profitable and focused TD, driving superior shareholder returns.

Valuation and Growth Potential

TD Bank is attractively valued, trading at a lower price-to-earnings ratio compared to its growth potential and industry averages.

Negative Factors

Earnings Contribution

The sale of TD's stake in Schwab has resulted in a significant decrease in earnings contribution to TD's second quarter, with a decline of approximately 68% from the previous quarter.

Economic Uncertainty

Management characterized the operating backdrop as one with a high degree of uncertainty, reflecting potential economic challenges.

Mortgage Portfolio

TD’s mortgage portfolio declined by 1% quarter-over-quarter in Q2, impacted by substantial repayment activity and low originations.

Toronto Dominion Bank Business Overview & Revenue Model

Company Description

The Toronto-Dominion Bank, together with its subsidiaries, provides various financial products and services in Canada, the United States, and internationally. It operates through three segments: Canadian Retail, U.S. Retail, and Wholesale Banking. The company offers personal deposits, such as chequing, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; and financing options to customers at point of sale for automotive and recreational vehicle purchases. It also provides credit cards and payments; real estate secured lending, auto finance, and consumer lending services; point-of-sale payment solutions for large and small businesses; wealth and asset management products, and advice to retail and institutional clients through direct investing, advice-based, and asset management businesses; and property and casualty insurance, as well as life and health insurance products. The company also provides capital markets, and corporate and investment banking products and services, including underwriting and distribution of new debt and equity issues; advice on strategic acquisitions and divestitures; and trading, funding, and investment services to corporations, governments, and institutions. It offers its products and services under the TD Bank and America's Most Convenient Bank brand names. The company operates through a network of 1,061 branches and 3,381 automated teller machines (ATMs) in Canada, and 1,148 stores and 2,701 ATMs in the United States, as well as offers telephone, digital, and mobile banking services. It has a strategic alliance with Canada Post Corporation. The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

How the Company Makes Money

TD Bank makes money primarily through a diversified revenue model that includes interest income, non-interest income, and wealth management fees. Interest income is generated from lending activities, including personal loans, mortgages, and credit cards, where the bank earns interest on the money it lends. Non-interest income comes from various sources such as service fees, trading income, and insurance premiums. Wealth management and investment services provide another significant revenue stream, earning fees and commissions on assets under management and advisory services. Additionally, TD benefits from strategic partnerships and joint ventures, contributing to its earnings through expanded service offerings and market reach.

Toronto Dominion Bank Financial Statement Overview

Summary

Toronto Dominion Bank maintains a strong financial position with impressive profitability and operational efficiency as shown in the income statement. The balance sheet reflects a stable capital structure with a strong equity base, although leverage remains high. Cash flow analysis indicates effective cash generation despite recent declines in free cash flow growth. Overall, the bank is financially robust, but should monitor leverage and cash flow trends closely to maintain stability.

Income Statement

The Toronto Dominion Bank demonstrates strong financial performance in the TTM (Trailing-Twelve-Months) with a gross profit margin of 45.3% and a net profit margin of 14.6%, indicating efficient cost management and solid profitability. The revenue growth rate from 2024 to 2025 was modest at 0.1%, suggesting stable yet slow revenue expansion. The EBIT margin stands at 16.5%, and the EBITDA margin is 18.3%, both reflecting strong operational efficiency. Overall, the income statement highlights robust profitability and operational efficiency despite limited revenue growth.

Balance Sheet

The balance sheet shows a solid equity position with a debt-to-equity ratio of 4.98, indicating a high level of leverage, which is typical in the banking sector but also a potential risk factor. The return on equity (ROE) is a healthy 13.8%, demonstrating effective use of equity to generate profits. The equity ratio of 6.1% suggests a stable capital structure, although there is room for improvement in reducing leverage. Overall, the balance sheet reflects a strong equity base but highlights the need for careful management of high debt levels.

Cash Flow

The cash flow statement reveals strong cash generation capabilities with an operating cash flow to net income ratio of 1.80, indicating robust cash generation relative to reported earnings. The free cash flow growth rate from 2024 to 2025 is -45.0%, reflecting a significant decline, primarily due to fluctuations in operating cash flow. The free cash flow to net income ratio is 1.67, showcasing solid cash conversion from profits. Despite the decline in free cash flow growth, the cash flow position remains strong, emphasizing the bank's ability to generate cash efficiently.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	119.28B	119.17B	102.25B	59.44B	47.72B	54.62B
Gross Profit	54.03B	52.00B	48.59B	44.70B	42.49B	36.04B
EBITDA	21.82B	12.86B	14.80B	22.19B	19.20B	14.05B
Net Income	17.38B	8.84B	10.63B	17.43B	14.30B	11.89B
Balance Sheet
Total Assets	2.06T	2.06T	1.96T	1.92T	1.73T	1.72T
Cash, Cash Equivalents and Short-Term Investments	648.32B	568.21B	6.72B	179.68B	209.50B	273.88B
Total Debt	627.71B	460.66B	401.81B	374.04B	256.76B	40.96B
Total Liabilities	1.94T	1.95T	1.84T	1.81T	1.63T	1.62T
Stockholders Equity	126.09B	115.16B	112.11B	111.38B	99.82B	95.50B
Cash Flow
Free Cash Flow	29.01B	52.76B	-67.15B	37.49B	49.00B	230.03B
Operating Cash Flow	31.23B	54.94B	-39.81B	38.95B	50.13B	231.79B
Investing Cash Flow	-42.60B	-45.42B	76.23B	-31.89B	-45.27B	-224.12B
Financing Cash Flow	21.55B	60.11B	-38.33B	-4.82B	-5.04B	-6.13B

Toronto Dominion Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 100.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

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 100.69 is above the 20-day moving average (MA) of 98.40, above the 50-day MA of 94.05, and above the 200-day MA of 82.84, indicating a bullish trend. The MACD of 1.99 indicates Positive momentum. The RSI at 78.31 is Negative, neither overbought nor oversold. The STOCH value of 49.37 is Neutral, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TD	79 Outperform	$176.38B	10.43	14.27%	4.17%	13.12%	61.99%
BMO	77 Outperform	$82.10B	14.71	9.88%	3.90%	15.63%	66.95%
Sector *	58 Neutral	HK$91.33B	5.24	-3.21%	5.29%	7.36%	-55.21%
BNS	―	$67.90B	15.33	8.00%	5.93%	―	―
CM	―	$68.26B	12.77	13.19%	3.88%	―	―
RY	―	$185.79B	14.60	14.17%	3.13%	―	―
NTIOF	―	$40.29B	13.49	13.42%	3.36%	―	―

Toronto Dominion Bank Corporate Events

TD Bank Group Appoints New Global Head of Financial Crime Risk Management

TD Bank Group has appointed Jacqueline Sanjuas as the new Global Head of Financial Crime Risk Management, succeeding Herb Mazariegos. With over 20 years of experience in compliance and risk management, Ms. Sanjuas has been instrumental in enhancing the bank’s U.S. anti-money laundering program since joining TD in January 2024. These leadership changes are expected to strengthen TD’s efforts in financial crime risk management across its global operations.