Market Chatter: TD Upgraded as Jefferies Names Canadian Lender as Top Pick for 2025
07:25 AM EST, 12/13/2024 (MT Newswires) -- The path ahead for Toronto-Dominion Bank is rocky, but analysts at Jefferies Financial Group Inc. are predicting a recovery in the stock's valuation as they turn bullish on the outlook for the Canadian lender and name it a top pick for 2025, Bloomberg reported Thursday.
Analysts led by John Aiken upgraded Canada's second-largest bank to buy from hold and raised their price target on the stock to C$90. While Aiken doesn't see a rebound in valuation happening in the near term, he expects it to improve as 2025 progresses.
"The challenges are not insurmountable, and we anticipate that several questions will be answered over the next year and believe that TD's multiple will recover some lost ground," Aiken wrote in a note published Thursday. "We are already seeing TD's valuation rebound as investors attempt to pick the bottom."
Bloomberg noted Toronto-Dominion has had a difficult 2024, with US money-laundering probes weighing on the stock. The company resolved those cases in October, pleading guilty to failing to prevent money laundering by drug cartels and other criminals. It also agreed to pay almost $3.1 billion in fines and other penalties, and faces a cap on its American assets. The lender last week suspended medium-term financial targets amid a review of company strategy as the incoming chief executive officer, Raymond Chun, seeks to move past the settlement.
Shares in Toronto-Dominion rose 0.4% in Toronto on Thursday, extending gains for a fourth straight session. The stock now has six buy recommendations, seven holds and two sells among analysts tracked by Bloomberg. With 2024 drawing to a close, Toronto-Dominion is not only on track to end the year as the worst performer among Canada's Big Six banks, but the lender is also set to have its worst year since 2008.
(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)