TD changes
Pick any two versions below to diff them.
- Price
- CA$172.92 → CA$177.06(+2.4%)
- Next earnings is estimate
- Yes → No
- Thesis
- TD trades at a premium because investors pay for a fast recovery in its returns after the U.S. anti-money laundering failures of 2024. Adjusted return on equity was 16.0% in Q3 fiscal 2026, and the bank already passed its fiscal 2026 target of about 13%. Adjusted diluted EPS grew 26% to $2.77. Canadian Personal and Commercial Banking, Wealth Management and Wholesale Banking all had record earnings. TD bought back $7 billion of shares by September 25, 2026 and started a new buyback of up to $10 billion in October 2026. The price assumes that returns stay near the fiscal 2029 target of about 16% adjusted return on equity and that the U.S. remediation stays on plan. For the premium to be earned, three things must be true. Wholesale Banking and Wealth Management must keep most of their gains when markets are less active, because they gave a large part of the profit growth. U.S. Banking must raise its return on equity from 10.2% in Q3 fiscal 2026 while its assets stay under the U.S. limit. Credit losses must stay near 0.37% of loans, even with weaker consumer credit in Canada and trade tension with the United States. The Q4 fiscal 2026 removed: report, expected in early added: report on December removed: 2026, added: 3, 2026 gives the first test with the targets for fiscal 2027. The U.S. lookback review of suspicious activity reports, which TD expects to complete in calendar 2027, is a second test. If returns fall back toward 13% when markets slow, the premium can shrink within one to two years.
- Checkpoints
- Dec 3, removed: 2026 (estimate): added: 2026: Q4 fiscal 2026 results and fiscal 2027 targets. Pending. Watch: Adjusted return on equity near 15% or more, stable credit losses and fiscal 2027 targets on the path to about 16% pass; lower returns or a large rise in provisions fail. 2027 (estimate): U.S. lookback review and remediation milestones. Pending. Watch: Completion of the U.S. lookback review of suspicious activity reports in calendar 2027 with no new penalties passes; new findings, higher costs or a delay fail.