Post by
bartno12001 on Aug 23, 2024 8:04am
Scotia analyst on td
Latest Research (August 22, 2024): OUR TAKE: Modestly Positive. Despite the sell-off on earnings day, we maintain our view that TD’s AML update was a net positive, and that the bank’s Q3 results were more constructive than the 1% core EPS miss to the Street suggested. While we acknowledge that the AML update leaves the door open to potentially higher fines and is mum on the key question of what the non-monetary restrictions on TD will be, we still believe that we have more clarity on this issue today than before the announcement and that this is ultimately a positive development. We say this in the context of a stock that is currently trading at a ~13% discount to peers based on consensus 2025 EPS versus a historical premium and trading ~25% below RY. We are not assuming that TD will be able to regain its premium valuation any time soon, but we do see scope for this discount to narrow in anticipation of final resolution of these regulatory issues. The market is still assuming very significant damage to TD’s earnings power in the U.S., an assumption that in our view is simply unrealistic and also not very consistent with the solid momentum we saw at TD’s P&C unit in Q3.