Toronto-Dominion Earnings: Decent Results as Strong Fee Income Helps Offset Higher Costs

Wide-moat-rated Toronto-Dominion Bank reported decent fourth-quarter results, though the bank’s unadjusted earnings remain messy due to a high volume of restructuring- and acquisition-related expenses. Adjusted revenue increased 5% from last year to CAD 13.8 billion. Meanwhile, adjusted earnings per share increased 4% from last quarter but fell 12% from last year due to higher operating and credit costs. As we incorporate these results, we do not plan to materially alter our CAD 92/USD 69 fair value estimates for the bank, and we see the shares as modestly undervalued.