Analysts on tdScotia - Sector outperform. Price target 87. Reduced from 90
Latest Research (May 23, 2024): OUR TAKE: Mixed. Even a 10% core EPS beat in Q2 was not enough to get TD bank shares going after months of underperformance. That is not all that surprising given that we headed into reporting season with the view that the quarter itself was largely irrelevant in the face of ongoing AML issues that are yet to be resolved. The big risk that US segment results would miss Street expectations did not come to pass, and in fact results there actually beat. But despite a solid quarter the shares underperformed, albeit modestly, as management acknowledged that branch growth in the US would take a back seat to remediation efforts. Management reiterated expense guidance for this year, but in the absence of explicit guidance for F2025 it is reasonable to assume that expense growth accelerates into F2025 tied to direct and indirect spending related to the bank’s AML issues. We continue to believe that the sell-off in the shares has gone too far and that a worst-case scenario for the US business is already being priced in. That said, the quarter clearly illustrates that whatever happens to EPS estimates, TD’s discount to the group is unlikely to materially narrow until the bank announces a full resolution with US regulators.
Desjardins
Patience is required when it comes to Toronto-Dominion Bank, Desjardins' analysts say. The bank's F2Q adjusted pretax, pre-provision earnings were 6% above what they expected, and they say that relative to their forecasts all TD's divisions except the corporate unit logged beats. Still, the focus was on U.S. anti-money laundering issues, and there wasn't materially more TD could say, they add. Desjardins affirms a buy recommendation but trims the target on the shares by C$2 to C$91.