Scotia analyst on tdMaintains 93 target price
Latest Research (May 06, 2024): OUR TAKE: It was a week to forget for TD, but with the stock down 6% on Friday (and down 8% for the week after already materially underperforming the peer group YTD) the key question for investors is: should the shares be bought at these levels? There is a lot we still don’t know about TD’s AML issues in the US including when they will be fully resolved and at what cost (monetary and non-monetary). However, a straight forward sum-of-the-parts (SoTP) analysis using consensus F2025 earnings estimates suggests that the worst-case scenario is already being priced into the shares given that the market now appears to be ascribing negative value to TD’s US Retail business. This is a segment that delivered $4.8 BB in adjusted net income in 2023 (excluding the bank’s stake in Charles Schwab). The overhang on the stock is likely to remain a reality for the foreseeable future, but we believe that last week’s sell off simply went too far. This business may very well be growth constrained for some time, but based on what we know there is simply no basis to believe that TD’s US earnings power has totally evaporated.