Company Reports

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.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide-moat-rated Toronto Dominion reported adjusted earnings per share of CAD 1.83, a 16% year-over-year decline and a sequential decrease of 8%. Beneath the messy results, outsize expense growth and the guidance for negative operating leverage in 2024 were the main negatives. Adjusted expenses came in 4% higher than a quarter ago, with additional restructuring charges of roughly CAD 363 million expected in the first quarter of 2024. It remains difficult to predict the future expense level over the short term, but as we factor in a mid-single-digit percentage core expense increase in 2024 and low-single-digit percentage increases thereafter, we don't think we're far off with our current projections. We may slightly increase our current expense projections, which may be a slight negative to our current fair value estimate of CAD 94/USD 69.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide-moat-rated Toronto Dominion reported adjusted earnings per share of CAD 1.99, a 5% year-over-year decline and a sequential increase of 3%. Results continue to be a bit messy, with a number of adjusting items related to the canceled First Horizon acquisition still hitting the income statement. It also became a bit more clear that issues with the bank’s anti-money laundering/Bank Secrecy Act compliance likely played a role in regulators withholding approval of the acquisition. The bank cited that there are ongoing investigations involving the U.S. Department of Justice related to these issues, and the bank expects monetary and/or nonmonetary penalties to be imposed. It is difficult to know what exactly these penalties will be, but consent orders and fines are typical in such instances. The bank’s current estimate of reasonably possible losses related to all legal and regulatory matters, which could include additional matters not related to this specific investigation, ranges from CAD 0 to CAD 1.29 billion. While this type of fine would not be material, it is never ideal to fall under the regulator’s gaze in this way, and it can lead to other sources of value destruction.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide-moat-rated Toronto-Dominion reported OK fiscal second-quarter earnings. Adjusted earnings per share were CAD 1.94, representing a year-over-year decline of 4% and a sequential decline of 13%. Results continue to be a bit messy, with a number of adjusting items related to the canceled First Horizon acquisition, while the Cowen acquisition was closed during the quarter. With the First Horizon acquisition now canceled, a number of these one-time items should cease, while the Cowen run rate will become more clear as the year progresses. As a reminder, we had felt the First Horizon acquisition was fully priced and assigned no additional value from its completion, so its cancelation does not materially affect our view of Toronto-Dominion’s fair value.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide-moat-rated Toronto Dominion reported OK fiscal first-quarter earnings. Adjusted earnings per share were CAD 2.23, representing year-over-year growth of 7% and sequential growth of 2%. This is just below the run rate the bank will need to meet its original 2023 EPS growth outlook, so the bank will have to keep growing EPS from here, even as credit costs potentially increase. Adjusted pretax preprovisioning earnings, or PTPP, were up 10% sequentially.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide-moat-rated Toronto-Dominion reported decent fiscal fourth-quarter earnings. Adjusted earnings per share were CAD 2.18, representing year-over-year growth of 4% and sequential growth of 4%, and roughly in line with our own estimate of CAD 2.15. Adjusted pretax pre-provisioning earnings were up 2% sequentially.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide-moat-rated Toronto Dominion Bank reported adequate fiscal third-quarter earnings. Adjusted earnings per share were CAD 2.09, representing year-over-year growth of 6% and sequential growth of 3%. Adjusted preprovision pretax earnings were up 6% year over year and sequentially.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.

Wide moat rated Toronto Dominion reported decent fiscal second-quarter earnings. Adjusted earnings per share were CAD 2.02, a small beat compared to the S&P GMI consensus of CAD 1.93 and representing a year-over-year decline of 1%. Provisioning remained quite low, at a net cost of only CAD 27 million, while the provision for credit losses, or PCL, ratio was only 1 basis point. We would expect these numbers to start normalizing higher eventually, but predicting the timing of such a normalization in credit remains difficult.

Wide-moat-rated Toronto-Dominion reported decent fiscal first-quarter results. Adjusted earnings per share were CAD 2.08, representing year-over-year growth of 14%. Credit costs remained quite low at only CAD 72 million. Net revenue was up 5% year over year, an average result, as net interest income increased 4.5% and fees increased 5.5%. This puts the bank slightly ahead of our expectations on net interest income and relatively in line on fees. Expenses were up 3% year over year, a bit ahead of the 2% rate we are projecting for the full year. Given that both NII and expenses are slightly ahead of our annual growth rates, we don’t anticipate making any material changes to our CAD 97/$76 fair value estimate. We view the shares as fairly valued.

Wide-moat rated Toronto Dominion Bank reported solid fiscal fourth-quarter earnings. Adjusted earnings per share were CAD 2.09, coming in above Factset consensus estimates of CAD 1.93. Results also came in ahead of our own expectations, and the beat was broad-based, with revenue coming in higher and expenses coming in lower than we expected, leading to a 5% beat on full-year net income. Management was reticent to give much guidance on the call, citing the uncertainty of the current environment, which was interesting given most other Canadian banks this quarter have managed to give some updates on their thoughts for 2022. The only hint on the call was that hitting 7% in EPS growth in 2022 was unlikely, which isn’t too surprising given the bank recorded a net benefit from provisioning for 2021.

Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation's banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the United States, with the rest from other countries. Toronto-Dominion has done an admirable job of focusing on its Canadian retail operations and growing into number-one or -two market share for most key products in this segment. The bank also has number-two market share for business banking in Canada. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Toronto-Dominion should remain one of the dominant Canadian banks for years to come.