Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Toronto-Dominion Bank T.TD

Alternate Symbol(s):  TD | TDBCP | T.TD.PF.A | TDOPF | T.TD.PF.C | T.TD.PF.D | TDBKF | TDOMF | T.TD.PF.E | T.TD.PF.I | T.TD.PF.J

The Toronto-Dominion Bank (the Bank) operates as a bank in North America. The Bank's segments include Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. Its Canadian Personal and Commercial Banking segment offers a full range of financial products and services to approximately 15 million customers in the Bank’s personal and commercial banking businesses in Canada. Its U.S. Retail segment offers a range of financial products and services under the brand TD Bank, America’s Most Convenient Bank. U.S. Retail Segment also TD Auto Finance U.S., TD Wealth (U.S.) business. Wholesale Banking segment operates under the brand name TD Securities, which offers a range of capital markets and corporate and investment banking services to corporate, government, and institutional clients. Its Wealth Management and Insurance segment provides wealth solutions and insurance protection to approximately six million customers in Canada.


TSX:TD - Post by User

Post by retiredcfon Jun 09, 2023 9:19am
1003 Views
Post# 35488194

RBC

RBC

June 8, 2023

The Toronto-Dominion Bank
A good reminder of its strength in Canada

TSX: TD | CAD 78.97 | Outperform | Price Target CAD 96.00

Sentiment: Positive

On June 8, 2023, TD hosted an investor day on its Canadian retail businesses which include Canadian Personal Banking, Canadian Business Banking, and Wealth Management and Insurance. For the medium term, TD guided to a new ROE target of 16%+ (no guidance shared previously) and reiterated its core EPS growth target of 7% to 10%. We currently estimate a core ROE of 14.9% in 2023 and 15.0% in 2024 and we model core EPS to grow ~1% in 2023 and ~8% in 2024, clearly conservative relative to TD's medium-term targets. TD's 16%+ core ROE target is near the upper end of peers' medium-term ROE targets.

TD currently has ~$16 billion of excess capital available above the minimum CET 1 ratio. TD guided to a current CET 1 ratio target of 12%, versus our estimated 14.8% ratio for both Q3/23 and Q4/23. TD reiterated its intention to repurchase all 30 million shares under the current NCIB by the end of the summer and reassess future buyback plans at that time. See Exhibit 1 for a summary of TD's targets shared at the event compared to our current assumptions.

In Canadian Personal Banking, TD is targeting 50%+ growth in New-to-Canada acquisition, #1 market share in credit cards and core deposits, and $500 billion of real estate secured lending (RESL) loans. TD is expanding its presence in universities and partnering with loyalty programs for credit cards to win customers. TD also has a strategic relationship with CanadaVisa to support New-to-Canada acquisitions. To achieve the $500 billion RESL target, TD disclosed that it will need to increase loans by $140 billion, a ~40% increase over existing balances.

For Canadian Business Banking, TD is looking to achieve over 35% growth in business loans to $150 billion, over 25% growth in core deposits to $170 billion, and nearly 20% growth in auto loans to $32.5 billion. TD intends to target underpenetrated markets in British Columbia, Alberta, and Quebec by expanding scale and adding bankers. The bank also noted that it intends to leverage advanced machine learning to advance the loan approval process.

TD expects to continue growing its Wealth Management and Insurance business, targeting net asset growth to double to $225 billion in wealth management, and general insurance premiums to double to $9 billion. The small business insurance market is very fragmented and underserved in Canada, and TD intends to become the #1 small business insurer in Canada by enhancing its digital capabilities to serve clients.

As always, these events are a good reminder of the strength of a bank's franchise and how the bank thinks about growth opportunities going forward. For TD, we believe the Canadian franchise remains relatively strong with good growth prospects and solid risk management. We continue to see the stock as relatively undervalued and sense that growth opportunities still exist as does the capital deployment/optimization, which may provide more upside.


<< Previous
Bullboard Posts
Next >>