RE:B of A Securities upgrades TD to BUY TD Bank upgraded to Buy at BofA on sped-up CEO transition
Bank of America Securities upgraded Toronto-Dominion Bank (NYSE:TD) to Buy from Neutral on increased confidence that incoming CEO Raymond Chun can fix the bank's U.S. anti-money laundering issues.
At the same time, BofA analyst Ebrahim Poonawala, after speaking with Chun on Tuesday, expects the new CEO will drive the bank toward improved profitability compared with BofA's current forecast.
The bank pulled up its CEO transition to Feb. 1, instead of April 10, 2025, as it originally planned. In addition, changes at the board level, including the chairman and three other directors stepping down and the addition of four new board members, reflects increased accountability from leadership. The accelerated CEO change, along with the board refresh, "should be well-received," the analyst said.
TD Bank (NYSE:TD) stock climbed 4.0% in Friday midday trading.
"While the Street awaits a strategic update with new financial targets later in the year, we don't think Chun is likely to wait until then to execute on his priorities (such as potentially monetizing the Schwab (SCHW) stake and redeploying capital)," Poonawala wrote in a note to clients.
BofA's Buy rating on TD (TD) contrasts with the SA Quant rating of Hold and aligns with the average SA analyst rating and average Wall Street rating, both at Buy.
In December, TD (TD) suspended its financial targets as it conducts a strategic review. That came after the company agreed to pay more than $3B to settle U.S. investigations into its anti-money laundering practices