TD Bank(TD:CA) Stock Analysis
UBS Securities (Analyst Rank #20 of 355) released a research report on Wednesday July 2nd, and assigned TD Bank with a “Buy” rating and set a target price of $82 per share. This suggests UBS Securities believes TD Bank’s stock has potential upside from its current market price.
TD Bank Stock Forecast & Analysis
Analyst Target and Rating:
- Average Target Price: Analysts have an average target price of CAD 84.47 for TD Bank over the next 12 months, indicating potential upside from the current price of CAD 75.20.
- Average Analyst Rating: The average analyst rating for TD Bank is set as a “Buy,” suggesting a consensus among analysts that the stock is expected to perform positively relative to its current valuation.
Recent Stock Performance:
- Price Changes: TD Bank’s stock has shown recent declines:
- Weekly Change: -0.28%
- Monthly Change: -1.31%
- Annual Change: -8.42%
Fundamental Analysis:
Stock Target Advisor’s analysis of Toronto Dominion Bank (TD Bank) currently rates the stock as “Neutral,” balancing 5 positive signals against 6 negative signals:
Positive Fundamentals (Bullish Signals:
- Low Debt: TD Bank is less leveraged compared to its peers and ranks among the top quartile in terms of financial flexibility, which enhances its stability.
- Superior Risk-Adjusted Returns: The stock has historically performed well on a risk-adjusted basis compared to its sector peers, positioning it in the top quartile for investors looking for stable returns.
- High Market Capitalization: As one of the largest entities in its sector, TD Bank enjoys greater stability and market presence.
- Superior Dividend Growth: TD Bank has demonstrated top-quartile dividend growth over the past five years, making it appealing to income-seeking investors.
- High Dividend Returns: The stock has outperformed its sector peers in terms of average annual dividend returns, which is attractive for investors seeking income.
Negative Fundamentals (Bearish Signals)
- Poor Return on Assets: TD Bank’s management has delivered below median return on assets in the most recent four quarters compared to its peers, indicating potential inefficiencies in asset utilization.
- Overpriced Compared to Book Value and Earnings: The stock trades at a premium compared to its peers based on price-to-book value and price-to-earnings ratios, potentially suggesting overvaluation.
- High Volatility: TD Bank exhibits above median volatility in total returns within its sector over the past five years, indicating higher risk for investors sensitive to market fluctuations.
- Negative Cash Flow: The company reported negative total cash flow in the most recent four quarters, which could raise concerns about its ability to fund operations and investments.
- Poor Return on Equity: TD Bank’s return on equity has been below median in the most recent four quarters compared to its industry peers, indicating lower profitability relative to shareholder equity.
Final Analysis:
Investors considering TD Bank should weigh the positive attributes such as low debt, superior dividend growth, and high market capitalization against the challenges highlighted by Stock Target Advisor’s analysis. These include concerns over profitability metrics, valuation metrics, and historical volatility. Understanding these factors is crucial for making informed investment decisions aligned with individual risk tolerance and financial objectives.
