Download PDF

1. Company Snapshot

1.a. Company Description

The Toronto-Dominion Bank, together with its subsidiaries, provides various financial products and services in Canada, the United States, and internationally.It operates through three segments: Canadian Retail, U.S. Retail, and Wholesale Banking.The company offers personal deposits, such as chequing, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; and financing options to customers at point of sale for automotive and recreational vehicle purchases.


It also provides credit cards and payments; real estate secured lending, auto finance, and consumer lending services; point-of-sale payment solutions for large and small businesses; wealth and asset management products, and advice to retail and institutional clients through direct investing, advice-based, and asset management businesses; and property and casualty insurance, as well as life and health insurance products.The company also provides capital markets, and corporate and investment banking products and services, including underwriting and distribution of new debt and equity issues; advice on strategic acquisitions and divestitures; and trading, funding, and investment services to corporations, governments, and institutions.It offers its products and services under the TD Bank and America's Most Convenient Bank brand names.


The company operates through a network of 1,061 branches and 3,381 automated teller machines (ATMs) in Canada, and 1,148 stores and 2,701 ATMs in the United States, as well as offers telephone, digital, and mobile banking services.It has a strategic alliance with Canada Post Corporation.The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

Show Full description

1.b. Last Insights on TD

The Toronto-Dominion Bank's recent performance is driven by strong earnings and revenue growth. The company's Q3 2025 earnings call highlighted robust results, with a revenue of $10.22 billion, beating EPS estimates. Desjardins upgraded the stock to Buy, citing a strong Canadian P&C business and deposit base. TD Bank Group also presented a strategy to accelerate growth and enhance performance, including plans to slash costs with AI and revive medium-term growth targets, aiming for C$2 billion to C$2.5 billion in annualized cost savings.

1.c. Company Highlights

2. TD Bank Group Delivers Strong Q4 2025 Results with Record Revenue and EPS Growth

TD Bank Group reported a robust Q4 2025 with earnings of $3.9 billion, EPS of $2.17, beating analyst estimates of $2.01, and ROE up 110 basis points year-over-year. Revenue net of ISE grew 15% year-over-year, or 12% excluding the $388 million net negative impact of severe weather-related events. The bank's net interest income (NII) grew 7%, and net interest margin (NIM) expanded 6 basis points. Fee income grew 11%, with double-digit growth in service fees, lending fees, and wealth management.

Publication Date: Dec -07

📋 Highlights
  • Strong Earnings Growth: TD Bank Group reported Q4 2025 earnings of $3.9 billion (EPS $2.18), with ROE rising 110 bps YoY to 13.0%.
  • AI-Driven Value Creation: AI initiatives generated $170 million in value in Q4, with an additional $200 million expected in 2026 from new use cases.
  • Capital Strength: CET1 ratio maintained at 14.7%, supported by $6 billion in share repurchases and a $0.03 dividend hike to $1.08/share.
  • Wholesale Banking Momentum: Recorded $2.2 billion in revenue, driven by broad-based growth in Global Markets and Investment Banking.
  • Expense Control and Leverage: Expenses grew 5% in Q4 but moderated, with operating leverage positive for two consecutive quarters despite 10% YoY expense increase.

Business Segment Performance

The bank's businesses performed well across various segments. Canadian Personal and Commercial Banking delivered record revenue, deposits, and loan volumes. U.S. Retail saw core loans grow 2% year-over-year, with U.S. bank card balances up 14% year-over-year. Wealth Management delivered record earnings and assets, with direct investing seeing new accounts up 27% and trades per day up 37% year-over-year. Wholesale Banking delivered a record $2.2 billion in revenue.

Credit Quality and Capital Management

The company's credit results are strong, with gross impaired loan formations decreasing 3 basis points or $256 million quarter-over-quarter. Gross impaired loans were stable quarter-over-quarter at 56 basis points. The provision for credit losses was stable quarter-over-quarter at 41 basis points. The bank's CET1 ratio was 14.7%, with a strong capital generation in the quarter. The bank repurchased 65 million shares for a total of over $6 billion and plans to initiate a new share buyback of $6 billion to $7 billion.

Outlook and Valuation

The bank expects to achieve 6% to 8% EPS growth and 13% ROE targets for fiscal 2026. Analysts estimate next year's revenue growth at 4.7%. With a P/TBV ratio of 1.67 and a dividend yield of 3.44%, the stock appears reasonably valued. The bank's strong capital position, robust revenue growth, and improving credit quality support its ability to deliver on its targets. The company's focus on productivity initiatives and investments in its core franchise should drive long-term value creation.

Key Drivers and Risks

The key drivers of TD Bank's performance include its diversified business model, strong capital position, and improving credit quality. Risks include regulatory challenges, market volatility, and the potential impact of economic downturn on credit quality. The bank's U.S. AML remediation program has made significant progress, reducing the risk associated with regulatory compliance.

3. NewsRoom

Card image cap

Assessing TD Bank’s (TSX:TD) Valuation After Strong Earnings, Dividend Hike, and Strategy Update

Dec -06

Source:

Card image cap

Company News for Dec 5, 2025

Dec -05

Source:

Card image cap

The Toronto-Dominion Bank (TD) Q4 2025 Earnings Call Highlights: Record Earnings and Strategic ...

Dec -04

Source:

Card image cap

TSX Closer: Sets Fresh Record Close On Improved Commodity Prices and Optimism Around Economy

Dec -04

Source:

Card image cap

Canadian Big Bank Earnings Top Expectations, Raise Dividends

Dec -04

Source:

Card image cap

TD Bank Pushes Up Dividend After Underlying Earnings, Revenue Beat Expectations

Dec -04

Source:

Card image cap

Netflix in lead for WBD bid, Canadian banks top earnings estimates

Dec -04

Source:

Card image cap

Correction To TSX Closer: Up For the First Time This Week, Back To Near Last Friday's Record Close

Dec -04

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.34%)

6. Segments

Canadian Personal and Commercial Banking (CAD P&C)

Expected Growth: 8.0%

The Canadian Personal and Commercial Banking (CAD P&C) segment growth of 8.0% is driven by strong performance in personal deposits, mortgages, and business loans. Organic growth, strategic acquisitions, and market share gains also contribute to this growth. Additionally, TD's investments in digital platforms and customer experience enhancements have helped to drive engagement and attract new customers.

U.S. Retail

Expected Growth: 9.5%

The 9.5% growth in U.S. Retail from The Toronto-Dominion Bank is driven by factors such as increased consumer spending, improved economic conditions, and effective sales strategies. A strong labor market and rising wages have boosted consumer confidence, leading to higher retail sales. Additionally, the bank's investments in digital transformation and customer experience have likely contributed to its growth in the U.S. retail sector.

Wealth Management and Insurance

Expected Growth: 10.5%

The Toronto-Dominion Bank's Wealth Management and Insurance segment growth of 10.5% is driven by strong performance in Canadian Personal and Commercial Banking, robust assets under management, and increased insurance premiums. The growth is also attributed to the bank's strategic investments in digital platforms and customer acquisition, leading to expanded market share and improved profitability.

Corporate

Expected Growth: 7.0%

The Toronto-Dominion Bank's 7.0% growth is driven by strong performance in Canadian retail banking, wealth management, and capital markets. Key factors include expanding loan portfolios, increased market share, and strategic investments in digital transformation, enhancing customer experience and driving operational efficiency.

Wholesale Banking

Expected Growth: 11.0%

The Toronto-Dominion Bank's Wholesale Banking segment growth of 11.0% is driven by strong performance in corporate and investment banking, robust trading revenues, and increased market share in key markets. Strategic investments in digital platforms and talent acquisition have also contributed to this growth, enabling the bank to capitalize on emerging opportunities and deepen client relationships.

7. Detailed Products

Personal Banking

The Toronto-Dominion Bank offers various personal banking products and services, including chequing and savings accounts, credit cards, mortgages, and personal loans.

Business Banking

The bank provides a range of business banking products and services, including business chequing and savings accounts, business credit cards, and cash management solutions.

Wealth Management

The Toronto-Dominion Bank offers wealth management products and services, including investment and retirement accounts, financial planning, and investment advice.

Credit Cards

The bank issues a range of credit cards, including cash back, rewards, and low-interest cards.

Mortgages

The Toronto-Dominion Bank offers various mortgage products, including fixed-rate and variable-rate mortgages, and mortgage refinancing options.

Insurance

The bank offers various insurance products, including life insurance, health insurance, and property insurance.

Investment Banking

The Toronto-Dominion Bank provides investment banking products and services, including corporate finance, mergers and acquisitions, and equity and debt capital markets.

8. The Toronto-Dominion Bank's Porter Forces

Forces Ranking

Threat Of Substitutes

The Toronto-Dominion Bank operates in the financial services industry, where substitutes such as credit unions, online banks, and other financial institutions exist. However, the bank's strong brand reputation, extensive branch network, and wide range of services make it less likely for customers to switch to substitutes.

Bargaining Power Of Customers

The Toronto-Dominion Bank has a large customer base, and customers have some bargaining power due to the availability of alternative financial services providers. However, the bank's customer loyalty programs and competitive pricing mitigate the bargaining power of customers.

Bargaining Power Of Suppliers

The Toronto-Dominion Bank has a large and diversified supplier base, which reduces the bargaining power of individual suppliers. Additionally, the bank's significant market share and financial resources enable it to negotiate favorable terms with suppliers.

Threat Of New Entrants

The Toronto-Dominion Bank operates in a highly regulated industry, and new entrants face significant barriers to entry, such as high capital requirements and regulatory hurdles. This reduces the threat of new entrants.

Intensity Of Rivalry

The Toronto-Dominion Bank operates in a highly competitive industry, with many established players competing for market share. The bank faces intense rivalry from other major Canadian banks, as well as from smaller, more agile competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.00%
Debt Cost 18.17%
Equity Weight 20.00%
Equity Cost 9.10%
WACC 16.36%
Leverage 400.02%

11. Quality Control: The Toronto-Dominion Bank passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
TD Bank

A-Score: 7.3/10

Value: 5.6

Growth: 6.3

Quality: 4.8

Yield: 8.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
JPMorgan Chase

A-Score: 6.7/10

Value: 5.3

Growth: 5.2

Quality: 6.5

Yield: 5.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
BMO

A-Score: 6.7/10

Value: 3.8

Growth: 6.1

Quality: 3.6

Yield: 8.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Citigroup

A-Score: 6.2/10

Value: 6.7

Growth: 4.7

Quality: 4.4

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Bank of America

A-Score: 6.2/10

Value: 5.6

Growth: 5.3

Quality: 5.0

Yield: 5.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
NatBank

A-Score: 6.1/10

Value: 4.0

Growth: 4.7

Quality: 4.9

Yield: 6.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

125.12$

Current Price

125.12$

Potential

-0.00%

Expected Cash-Flows