Last Update 09 Mar 26

Fair value Increased 4.75%

TD: Future Will Reflect Easing Mortgage Risks And Ongoing Share Repurchases

Analysts have lifted their average price target for Toronto-Dominion Bank to about CA$141 from roughly CA$135, reflecting a series of recent target increases across the Street that reference stronger than expected results in several segments and updated earnings estimates.

Analyst Commentary

Recent research takes on Toronto-Dominion Bank cluster around higher target prices but with different views on how compelling the shares look at those levels. You can think of the commentary in terms of what the more optimistic analysts are focused on versus what the more cautious ones are watching closely.

Bullish Takeaways

Bullish analysts have lifted targets into a CA$140 to CA$148 range, which signals they see room in their models for a higher valuation on TD relative to prior assumptions.
Some of the more optimistic views are tied to stronger than expected results in several segments, with one research note flagging better total revenue, credit loss provisions, and non interest expenses versus internal forecasts.
Several target hikes are built on refreshed multi year earnings estimates for TD and its Canadian bank peers, including updates through FY26 and the introduction of FY27 assumptions in at least one case.
Higher targets at the upper end of the range are paired with positive ratings, which suggests these analysts see execution on current earnings plans as supportive of those revised valuation levels.

Bearish Takeaways

Bearish analysts maintain more cautious ratings even as they lift targets, indicating they see less upside to the current share price relative to their fair value estimates.
One preview framed the sector view as only modest earnings improvement, with expectations tied to balance sheet growth, stable net interest income, lower expenses, and continued buybacks rather than outsized profit expansion.
The same cautious camp highlights broader sector factors such as mortgage renewal concerns, which, while easing in their models, still appear meaningful enough to warrant Underweight or Neutral stances.
Not all business lines are seen as outperforming, with weaker Wealth Management and Insurance results mentioned alongside stronger segments, which keeps some analysts hesitant about assigning a richer valuation multiple.

What's in the News

TD Wealth is unifying its Private Investment Counsel and Private Investment Advice, Privately Managed Portfolios businesses into a single discretionary investment management platform under the Canadian Investment Regulatory Organization framework, aiming to simplify delivery for clients and advisors and support it with enhanced technology and a broader range of investment solutions (Key Developments).
The Board of Directors has authorized a normal course issuer bid under which Toronto-Dominion Bank plans to repurchase up to 61,000,000 shares, representing 3.64% of its issued share capital, for up to CA$7,000m. Repurchased shares are to be cancelled and the bid expires on January 15, 2027, or earlier if completed (Key Developments).
Under the buyback announced on February 24, 2025, TD reports that from November 1, 2025 to January 9, 2026, it repurchased 15,608,644 shares for CA$1,900m. This brings total repurchases under that program to 80,208,644 shares, or 4.66% of its shares, for CA$8,000m (Key Developments).
On January 7, 2026, TD said its Board of Directors would consider a proposal for a further normal course issuer bid for up to 61,000,000 shares, about 3.63% of its shares, for CA$7,000m. The plan is subject to approval from the Office of the Superintendent of Financial Institutions Canada and the Toronto Stock Exchange (Key Developments).
TD Bank is consolidating its Mid-South Metro segment into two regions, Mid-Atlantic Metro and Southeast Metro, to align teams and service models. Long-time executives Rob Curley and Nick Miceli will lead the regions that cover markets from Pennsylvania through Florida (Key Developments).

Valuation Changes

Fair Value: The updated internal fair value estimate has moved from about CA$134.67 to roughly CA$141.07, representing a modest step up in the implied valuation level.
Discount Rate: The discount rate used in the analysis has risen from 7.27% to about 8.33%, indicating a higher required return being applied to future cash flows.
Revenue Growth: The long-term CA$ revenue growth assumption has shifted from 0.37% growth to about a 2.26% decline, pointing to a more cautious view on top line expansion.
Net Profit Margin: The net profit margin assumption has edged up from roughly 25.82% to about 26.45%, reflecting a slightly stronger expected earnings contribution per CA$ of revenue.
Future P/E: The future P/E multiple used in the model has moved from 15.25x to about 15.97x, indicating a small increase in the valuation multiple applied to projected earnings.

18 views

Key Takeaways

Fintech disruption and regulatory expenses are pressuring traditional revenue streams and profit margins, challenging the bank's mid-term growth expectations.
Exposure to Canadian real estate and trade uncertainties heightens risk of credit losses and weakens confidence in lending and asset expansion strategies.
Strong revenue growth, digital innovation, strategic restructuring, and diversified operations position TD for sustained profitability and shareholder returns in evolving financial markets.

Catalysts

About Toronto-Dominion Bank

Provides various financial products and services in Canada, the United States, and internationally.What are the underlying business or industry changes driving this perspective?

Expectations for TD's future revenue growth may be overstated due to headwinds from the accelerating shift to digital and non-traditional financial services competitors, which are eroding the market share and fee income of traditional banks as fintechs and large tech platforms capture more of the financial services value chain.
Persistent investment in compliance (notably elevated AML remediation, cyber, and fraud prevention costs) is expected to drive higher structural expenses, weighing on net margins and overall earnings growth well into 2026 and 2027, as regulatory scrutiny and associated operational costs remain elevated.
The bank's outlook may be overly optimistic regarding lending growth and asset expansion in the US due to regulatory asset caps and balance sheet restructuring programs, which are anticipated to limit loan growth and put downward pressure on net interest income through most of 2026.
TD's overexposure to Canadian real estate and consumer lending heightens its sensitivity to a potential housing market correction, which could result in elevated credit losses, thereby increasing provisions and constraining EPS and return on equity in a slower-growth macroeconomic environment.
Prolonged uncertainty and potential volatility related to international trade (e.g., USMCA/CUSMA renegotiation and tariff risks) are likely to dampen business and consumer confidence, reducing demand for loans and wealth management products-threatening topline growth assumptions embedded in the valuation.

Toronto-Dominion Bank Earnings and Revenue Growth

Toronto-Dominion Bank Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Toronto-Dominion Bank's revenue will decrease by 0.5% annually over the next 3 years.
Analysts assume that profit margins will shrink from 32.0% today to 22.7% in 3 years time.
Analysts expect earnings to reach CA$14.2 billion (and earnings per share of CA$8.73) by about September 2028, down from CA$20.3 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as CA$16.4 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.6x on those 2028 earnings, up from 8.7x today. This future PE is lower than the current PE for the US Banks industry at 14.7x.
Analysts expect the number of shares outstanding to decline by 2.33% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.22%, as per the Simply Wall St company report.

Toronto-Dominion Bank Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Consistent volume and fee-based revenue growth in Canadian Personal and Commercial Banking, Wealth Management, and U.S. segments-and record asset levels in multiple divisions-indicate ongoing demand for TD's core services, which could support top-line revenue expansion even in challenging environments.
Robust execution in AI/digital initiatives (e.g., TD AI Prism, Virtual AI Assistant) and continued investment in digital/mobile banking position TD to benefit from the secular shift toward digital financial services, potentially increasing operational efficiency and net margins.
Strategic restructuring-including exiting low-return portfolios, targeted asset sales, and focused cost reduction programs-is generating significant cost savings and improving the bank's return on equity and profitability, providing cushion for long-term earnings growth.
Strong capital position, with a CET1 ratio at 14.8%, and completion of major share buybacks, enhances TD's ability to increase dividends or repurchase additional shares, which could underpin shareholder returns and support the share price.
Growing capital markets and advisory franchise (bolstered by the Cowen acquisition) and diversified earnings mix (including resilient insurance and wholesale banking) strategically position TD to capture growth opportunities and achieve stronger profit margins as global financial conditions stabilize.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$106.0 for Toronto-Dominion Bank based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$120.0, and the most bearish reporting a price target of just CA$93.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$62.5 billion, earnings will come to CA$14.2 billion, and it would be trading on a PE ratio of 14.6x, assuming you use a discount rate of 7.2%.
Given the current share price of CA$103.33, the analyst price target of CA$106.0 is 2.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Toronto-Dominion Bank?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

TD: Future Performance Will Rely On U.S. Earnings And Cost Control Efforts