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The Toronto-Dominion Bank TD

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Morningstar’s Analysis

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Wholesale Banking Growth Continues to Be Good for Toronto Dominion in First Quarter of 2021

Eric Compton, CFA Senior Equity Analyst

Analyst Note

| Eric Compton, CFA |

Wide-moat rated Toronto Dominion reported decent fiscal first-quarter earnings. Adjusted earnings per share were CAD 1.83, soundly beating consensus. This represented year-over-year EPS growth of 10%, primarily driven by fee income growth of 8% and lower provisioning. Provisioning was back to its lowest level in years. These results align with our view that the Canadian banks will be fine and that better results should be returning in 2021. So far, results have been even better than expected. We are increasing our fair value estimate to CAD 82/USD 65 per share from CAD 79/USD 61. As the pandemic has further played out and we are more confident in vaccine distribution and economic resilience, we are also lowering our uncertainty rating back to medium from high.

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Company Profile

Business Description

Toronto-Dominion is one of Canada's two largest banks and operates three business segments: Canadian retail banking, U.S. retail banking, and wholesale banking. The bank’s U.S. operations span from Maine to Florida, with a strong presence in the Northeast. It also has a 42% ownership stake in TD Ameritrade, a discount brokerage.

C/o General Counsel’s Office, P.O. Box 1, Toronto-Dominion Centre
Toronto, ON, M5K 1A2, Canada
T +1 416 308-6963
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Jan 31, 2021
Fiscal Year End Oct 31, 2020
Stock Type
Employees 89,598