9. INDUSTRY, INNOVATION, AND INFRASTRUCTURE

TD Bank Releases Q2 FY23 Financial Results Adjusted EPS Drops YoY

Written by Amanda

On May 25, 2023, The Toronto-Dominion Bank (TD) released its Q2 FY23 financial results. The report indicated that TD had experienced a 1% YoY increase in adjusted net income, resulting in C$3.8 billion. However, adjusted EPS had dropped from C$2.02 to C$1.94 in comparison to the previous year.

Canadian Personal & Commercial Banking earnings had increased by 4% YoY, totaling C$1.63 billion, while Wealth Management & Insurance earnings had decreased by 16% YoY, totaling C$563 million. Meanwhile, U.S. Retail earnings had increased by 3% YoY, with U.S. Retail Bank earnings rising by 2% YoY to C$1.16 billion.

Wholesale Banking net income had decreased by 58% YoY, totaling C$150 million. The provision for credit losses had risen to C$599 million from C$27 million the previous year. Adjusted revenue had increased to C$12.5 billion from C$11.0 billion the previous year.

CET1 had increased to 15.3% from 14.7% the previous year, and the adjusted return on common equity (ROE) had decreased to 14.1% from 15.9% the previous year. Additionally, the leverage ratio had increased to 4.6% from 4.3% the previous year.

During Q2, TD had closed the acquisition of Cowen Inc for C$1.5 billion in cash, C$253 million for the settlement of Cowen’s Series A Preferred Stock, and C$205 million to replace share-based payment awards. However, for FY 2023, TD did not expect to meet its medium-term adjusted EPS growth target range of 7%-10% due to the challenging macroenvironment and mutual termination of the merger deal with First Horizon Corp (NYSE:FHN).

TD Stock Opens Lower on May 25, 2023 But Shows Strong Earnings and Revenue Growth

On May 25, 2023, TD stock opened at 59.13, down 0.55% from the previous day’s close of 59.68. The stock had a day’s range of 57.24 – 59.23 and a volume of 2,742,912. TD’s market cap is $111.0B.

TD’s earnings growth in the last year was 19.83%, and this year it is expected to grow by 3.03%. TD’s revenue growth in the last year was impressive at 27.21%.

TD’s P/E ratio of 9.5 is lower than the industry average, indicating that the stock may be undervalued. The price/sales ratio of 2.38 and price/book ratio of 1.51 are also lower than the industry average.

Comparing TD’s stock performance to other major banks in the industry, TD’s stock had a smaller decline of 0.55% on May 25, 2023.

TD’s net profit margin of 27.79% is higher than the industry average.

TD Bank: A Stable and Reliable Investment Option with Strong Financial Performance

TD Bank, also known as Toronto-Dominion Bank, is a Canadian multinational banking and financial services corporation. It is one of the largest banks in Canada and has a significant presence in the United States. Three analysts have offered 12-month price forecasts for TD stock, with a median target of 73.00, a high estimate of 84.60, and a low estimate of 58.27. This median estimate represents a 27.02% increase from the last price of 57.47.

The current consensus among six polled investment analysts is to buy stock in TD Bank. TD Bank has been performing well in the current quarter, reporting earnings per share of $1.61 and sales of $9.4 billion. The reporting date for this quarter is August 24, 2023. TD Bank has a strong presence in the Canadian and American markets, which makes it a stable and reliable investment option for investors. The bank has a diversified portfolio of businesses that includes retail banking, wealth management, and investment banking. TD Bank has a strong track record of delivering solid financial performance, which makes it an attractive investment option for investors who are looking for steady returns.

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About the author

Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai