Toronto Dominion Bank (TD) AI Stock Analysis

• Market Cap: C$154.75B
• Dividend Yield: 4.63%
• Average Volume (3M): 10.59M
• Price to Earnings (P/E): 18.7
• Beta (1Y): 0.90
• Revenue Growth: 11.78%
• EPS Growth: -25.44%
• Country: CA
• Employees: 100,424
• Sector: Financial
• Sector Strength: 87
• Industry: Banks - Diversified
• EPS (TTM): 2.02
• Shares Outstanding: 1,751,700,000
• 10 Day Avg. Volume: 7,678,198
• 30 Day Avg. Volume: 10,587,806
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: C$89.37
• Price Target Upside: 1.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Toronto Dominion Bank's strong revenue growth and solid balance sheet are key strengths, supported by strategic restructuring and a robust capital position. However, the stock faces challenges with declining operational cash flow and economic uncertainties impacting credit provisions. A moderately attractive valuation and positive dividend yield offer additional incentives for investors. The recent executive appointment further strengthens risk management, which is crucial given ongoing AML remediation efforts.

Positive Factors

Brokerage Commissions

Despite the lower contribution to TD's earnings, increased trading volumes are expected to lead to positive brokerage commissions.

Stock Upside Potential

The stock has a favorable upside potential with a total return expectation of approximately 15% due to successful AML remediation and asset repositioning.

Wealth & Insurance Performance

Wealth & Insurance earnings significantly exceeded expectations due to market appreciation and higher premiums.

Negative Factors

Canadian Personal & Commercial Performance

Canadian Personal & Commercial results were below expectations due to slightly lower volume growth and net interest margin.

Earnings

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.

Operating Leverage

Despite a 9% increase in revenue, expenses grew by 12%, leading to negative operating leverage of -3.0%.

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 demonstrates strong revenue growth and a solid balance sheet with significant reductions in debt, supporting financial stability. However, the decline in net income growth and operating cash flow could pose challenges in sustaining long-term profitability and liquidity. The bank needs to address these areas while leveraging its strong equity position.

Income Statement

The income statement shows a consistent upward trend in total revenue, with a TTM (Trailing-Twelve-Months) revenue of $57.2 billion, up from $55.9 billion in the previous year. However, the net income has slightly decreased to $8.81 billion from $8.84 billion, indicating a slight compression in profitability. The gross profit margin remains robust at 100% as expected for a bank, but the net profit margin has slightly decreased. The EBIT margin decreased from previous periods, while the EBITDA margin shows slight improvement. Overall, revenue growth is strong, but net income growth is slightly stagnating.

Balance Sheet

The balance sheet reflects strong equity with stockholders' equity at $119 billion, and a low Debt-to-Equity ratio given the banking industry standards. The Total Debt has significantly decreased from $460.7 billion to $52.7 billion in the TTM period, which enhances financial stability. The equity ratio is strong, reflecting solid capital management. Overall, the bank's balance sheet is robust with a strong equity base and reduced debt levels.

Cash Flow

The cash flow analysis indicates a decrease in operating cash flow from $54.9 billion to $29.3 billion in the TTM period, which raises concerns about short-term liquidity. Free cash flow has also declined, impacting the free cash flow to net income ratio. However, the bank is managing capital expenditures efficiently. Overall, while cash flow generation has weakened, it remains positive, but the declining trend warrants attention.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
55.95B	51.48B	45.76B	42.27B	43.28B
	Gross Profit
55.95B	52.93B	45.76B	42.27B	43.28B
	EBIT
20.67B	15.76B	35.09B	17.92B	13.05B
	EBITDA
22.69B	15.00B	22.19B	19.20B	14.05B
	Net Income Common Stockholders
8.84B	10.78B	17.43B	14.30B	11.89B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
230.49B	6.72B	179.68B	209.50B	273.88B
	Total Assets
2.06T	1.96T	1.92T	1.73T	1.72T
	Total Debt
460.66B	401.81B	374.04B	256.76B	40.96B
	Net Debt
282.64B	296.74B	228.19B	90.87B	-129.63B
	Total Liabilities
1.95T	1.84T	1.81T	1.63T	1.62T
	Stockholders Equity
115.16B	112.11B	111.38B	99.82B	95.50B
Cash Flow		Free Cash Flow
52.76B	-67.15B	37.49B	49.00B	230.03B
	Operating Cash Flow
54.94B	-39.81B	38.95B	50.13B	231.79B
	Investing Cash Flow
-45.42B	76.23B	-31.89B	-45.27B	-224.12B
	Financing Cash Flow
-9.81B	-38.33B	-4.82B	-5.04B	-6.13B

Toronto Dominion Bank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 88.34 is above the 20-day moving average (MA) of 83.90, above the 50-day MA of 84.14, and above the 200-day MA of 79.59, indicating a bullish trend. The MACD of 1.28 indicates Negative momentum. The RSI at 67.66 is Neutral, neither overbought nor oversold. The STOCH value of 90.48 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMO	77 Outperform	$71.08B	12.67	10.01%	4.61%	15.63%	66.95%
TD	76 Outperform	C$154.75B	18.72	7.68%	4.63%	11.78%	-25.44%
Sector *	64 Neutral	$12.61B	9.78	8.01%	16985.69%	12.73%	-4.58%

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.