The Toronto-Dominion Bank (TD) has just delivered a busy day for investors. On December 4, 2025, the bank reported fourth-quarter and full-year 2025 results, announced a higher dividend and outlined guidance that will shape expectations for 2026 and beyond. At the same time, TD’s share price is hovering near record highs after a spectacular year-long rally, forcing investors to ask whether there is still upside left in the stock. [1]
TD stock today: near record highs after a 50%+ 2025 rally
TD has been one of the standout performers among large North American banks in 2025. On the NYSE, TD shares are trading around US$84–85, while on the TSX the stock sits near C$118 in afternoon trading on December 4. [2]
Over the past year:
- Reuters reports that TD’s shares have gained nearly 54% in 2025 year-to-date. [3]
- Fintel data show the U.S. listing rising from about US$56 in early December 2024 to roughly US$84–85 now — an increase of around 50%. [4]
The rally has been driven by a combination of:
- Resolution of TD’s U.S. anti‑money‑laundering (AML) investigations in late 2024, which removed a major overhang even though remediation is ongoing. [5]
- TD’s decision in February 2025 to sell its 10.1% stake in Charles Schwab for about US$14 billion, with roughly C$8 billion earmarked for share buybacks and the rest for growth initiatives. [6]
- A “back to winning” efficiency and growth plan outlined at the bank’s Investor Day on September 29, 2025, including aggressive cost-savings targets and larger capital returns. [7]
The result: TD now trades close to 52‑week highs, with many institutions still accumulating positions. MarketBeat notes that institutional investors own just over 52% of TD’s U.S. shares, with new stakes from large players such as Arrowstreet Capital, Norges Bank and Goldman Sachs. [8]
Q4 2025 results: GAAP earnings down, adjusted profit and margins up
TD’s fourth quarter (for the three months ended October 31, 2025) delivered exactly the kind of mixed-but-better-than-feared picture the street had been hoping for.
According to TD’s official earnings release and multiple newswires: [9]
- Reported (IFRS) net income was C$3.28 billion, down from C$3.64 billion a year earlier.
- Reported EPS came in at C$1.82, versus C$1.97 in Q4 2024.
- Adjusted net income rose to about C$3.91 billion, up from C$3.21 billion a year earlier.
- Adjusted EPS was C$2.18, comfortably ahead of the roughly C$2.01 consensus estimate.
- Reported revenue was essentially flat at C$15.49 billion versus C$15.51 billion a year earlier, while adjusted revenue climbed to roughly C$16.03 billion from about C$14.9 billion in Q4 2024, driven by fee income, trading and stronger Canadian retail volumes. [10]
- Adjusted net interest income — the spread between what TD earns on loans and pays on deposits — rose to C$8.59 billion from C$8.03 billion, highlighting the benefit of higher rates and loan growth. [11]
On a full‑year basis, TD reported: [12]
- Reported 2025 net income of C$20.54 billion (inflated by one‑off items, including the accounting impact of the U.S. AML settlement).
- Adjusted 2025 earnings of C$15.0 billion, or C$8.37 per share, versus C$14.28 billion in 2024.
Profitability metrics remain solid:
- Adjusted return on equity (ROE) was 12.8% in Q4 and 12.9% for the full year, compared with 11.7% in Q4 2024.
- Provision for credit losses was C$982 million in Q4, implying a loan‑loss ratio of about 0.41%, broadly consistent with the prior quarter and down versus the year‑ago period. [13]
On the balance sheet, as of October 31, 2025, TD reported:
- C$2.1 trillion in total assets,
- C$953 billion in net loans, and
- C$1.27 trillion in deposits,
with total equity of about C$127.8 billion and risk‑weighted assets of C$636 billion. [14]
Collectively, the numbers show a bank absorbing heavy compliance costs and restructuring charges, yet still managing to grow underlying earnings and maintain double‑digit returns.
Dividend increase and a new semi‑annual review cycle
Alongside earnings, TD announced a fresh dividend increase. The board declared a common share dividend of C$1.08 per quarter for the quarter ending January 31, 2026, up from C$1.05 in recent quarters. At today’s TSX price near C$118, that implies an annualized dividend of C$4.32 and a yield of roughly 3.7%. [15]
In the same release, TD said it is moving from an annual to a semi‑annual dividend review cycle, signalling an intent to keep dividend growth more closely aligned with earnings momentum over time. [16]
The bank continues to offer a Dividend Reinvestment Plan (DRIP), currently funded by purchasing shares in the open market (no discount to market price for the upcoming payment). Preferred shareholders also receive declared dividends across the listed series. [17]
Combined with TD’s earlier plan to deploy a large chunk of Schwab‑sale proceeds into share buybacks, the message is clear: management aims to return substantial capital to shareholders while still funding AML remediation and growth. [18]
Strategic reset after a historic U.S. AML scandal
Much of TD’s investment narrative still revolves around its U.S. anti‑money‑laundering failures and the costly clean‑up that followed.
In October 2024, TD reached a sweeping resolution with U.S. regulators and prosecutors: [19]
- TD and U.S. subsidiaries pleaded guilty to charges related to Bank Secrecy Act (BSA) compliance failures and money‑laundering conspiracies.
- The bank agreed to pay a total of about US$3.09 billion in penalties and forfeitures, largely covered by previously booked provisions.
- U.S. regulators imposed:
- a multi‑year monitorship under an independent compliance monitor,
- an asset cap that prevents TD’s U.S. banking subsidiaries from growing beyond about US$434 billion in assets until remediation objectives are met, and
- tougher approval processes for new products and branches.
TD’s own account emphasizes the scale of the remediation effort: a completely overhauled U.S. AML leadership team, more than 700 new AML specialists, upgraded technology, and a board‑level committee dedicated to financial crime oversight. [20]
Independent coverage notes that regulators alleged TD’s weak controls enabled hundreds of millions of dollars in illicit transactions, including drug‑related flows, and that U.S. AML remediation will likely cost hundreds of millions of dollars annually for several years. TS2 Tech+1
Against this backdrop, Raymond Chun was accelerated into the role of Group President and CEO on February 1, 2025, earlier than initially planned, as part of a wider leadership refresh. TS2 Tech
“Back to Winning”: cost cuts, technology and capital deployment
At TD’s Investor Day in late September, Chun and his team presented a multi‑year strategy explicitly branded as getting “back to winning” by fiscal 2029. Key elements include: [21]
- Sharper financial targets
- Adjusted ROE near 16% by 2029, up from roughly 13% expected in fiscal 2026.
- Adjusted EPS growth in the 7–10% annual range over the medium term.
- A lower efficiency ratio, pushing TD’s cost‑to‑income ratio from around 58% into the mid‑50s.
- C$2–2.5 billion in structural cost savings, including about C$500 million linked to automation and AI initiatives.
- C$6–7 billion in share repurchases in 2026, leveraging TD’s strong capital base and proceeds from non‑core disposals like the Schwab stake. [22]
- A pivot toward higher‑margin, fee‑based businesses such as wealth management, insurance and broader capital‑markets activities, to complement traditional lending. TS2 Tech+2GuruFocus+2
For fiscal 2026 specifically, TD is guiding to adjusted EPS growth of 6–8%, framing 2025 as a “transition year” heavy on restructuring and U.S. balance‑sheet optimization. [23]
Analyst ratings and stock forecasts: tight upside on TSX, mixed picture in New York
The surge in TD’s share price has squeezed forward returns in many analysts’ models, especially on the Canadian listing.
TSX: TD (C$)
- MarketBeat’s Canadian consensus (TSE: TD) shows an average 12‑month price target of about C$109.46, with a range from C$89 to C$125 and a rating tilted toward “Hold”. That average target sits roughly 7% below the current ~C$118 share price. [24]
- TipRanks aggregates 11 analysts with a “Moderate Buy” rating and an average target around C$117.9, essentially flat versus today’s price, within a rough range of C$108–126. [25]
- TradingView shows a C$119.79 average target from 14 analysts, plus a “Buy” rating based on 16 recent recommendations, implying only low‑single‑digit upside from current levels. [26]
NYSE: TD (US$)
On the U.S. listing, the picture is more varied:
- StockAnalysis.com reports 2 analysts covering TD with a “Buy” consensus and an average target of US$105, implying roughly 24–25% upside from around US$84. [27]
- A Benzinga summary of analyst targets cites a consensus around US$92.8 based on seven analysts, with a range from US$82 to US$120, suggesting upside closer to 10% from current levels. [28]
- TickerNerd’s compilation of Wall Street forecasts is more conservative, with a median 12‑month target of US$78.63 and a range of US$67.80–92.76, implying roughly 7% downside versus today’s price. [29]
Several high‑profile brokers remain constructive. RBC Capital upgraded TD to “Outperform” on October 3, 2025, lifting its price target to about C$120, arguing that a sharper focus on capital and costs should justify a higher valuation multiple. [30]
In short:
- Canada listing: most models see TD as roughly fairly valued, with targets clustering within ±7% of the current price.
- U.S. listing: forecasts range from marginal downside to mid‑20% upside, reflecting different assumptions around exchange rates, earnings normalization and AML‑related drag.
Valuation: cheap bank or fully priced turnaround?
Despite the rally, TD still trades at modest absolute multiples:
- GuruFocus and other data providers peg TD’s price‑to‑earnings ratio at about 10x, a discount to global financials and only slightly below the Canadian bank average. [31]
- Price‑to‑book sits around 1.7x, near three‑year highs, while price‑to‑sales is about 3.4x. [32]
- Profitability remains strong, with a net margin north of 30% and ROE in the high teens on some metrics, though those figures are flattered by one‑off items and the rebound from 2024’s AML charges. [33]
Some independent valuation models still see meaningful upside:
- A widely cited “Excess Returns” model on Simply Wall St, summarized in recent TS2 coverage, estimates intrinsic value near C$160, implying 20–30% upside from current TSX levels. TS2 Tech
Others are more cautious:
- Morningstar raised its fair value estimate earlier in 2025 to about C$93 (US$65), but that still leaves TD trading more than 25% above its assessed intrinsic value today, reflecting Morningstar’s view that 2025 would be “messy” due to AML spending and balance‑sheet optimization. [34]
This divergence in fair‑value views explains why some analysts frame TD as a still‑undervalued quality franchise, while others see a good bank at a full price after its 2025 rally.
Market sentiment and technicals: trend still bullish, but momentum is stretched
From a market‑behavior standpoint:
- GuruFocus highlights strong revenue growth, robust profitability and a Piotroski F‑Score of 7, suggesting healthy fundamentals, but flags high leverage and valuation metrics near recent highs as cautionary signs. [35]
- TS2’s roundup of StockInvest and other technical models notes that TD remains in a rising trend channel, with support in the US$81–82 area on the NYSE. Trend‑following models currently rate the stock as a “strong buy” candidate in the near term, while warning that a decisive break below support would flip signals to sell. TS2 Tech
For now, momentum remains positive: TD has posted gains in a majority of recent sessions, volatility is moderate, and institutional inflows continue, even as some funds take profits after the run‑up. [36]
Key risks for TD Bank shareholders
Despite the upbeat quarter, several risks could impact TD’s share price and earnings trajectory:
- Regulatory and AML risk
- TD remains under monitorship and an asset cap in its U.S. banking operations. Any negative findings from the monitor, delays in remediation or additional enforcement actions could depress earnings and valuation. [37]
- Macro and credit risk
- Canadian banks are navigating elevated household debt, housing‑market sensitivity to interest rates and potential weakening in consumer credit. Analysts cited by Reuters and others warn that credit quality and exposure to opaque markets such as private credit remain points of concern across the sector. [38]
- Execution risk on cost cuts and technology
- TD is targeting billions in cost savings and leaning heavily on automation and AI. Delivering these savings without damaging the franchise, culture or risk controls is a non‑trivial challenge, especially while simultaneously rebuilding AML credibility. TS2 Tech+1
- Valuation risk after a big rally
- With the stock up more than 50% in a year, even small disappointments in earnings, guidance or AML milestones could trigger pullbacks, especially now that many price targets sit close to — or below — the current quotation. [39]
Outlook: a high‑quality franchise priced for “cautiously optimistic” expectations
The December 4 earnings day confirms a few things about TD Bank stock:
- The core franchise is still very profitable, with expanding adjusted earnings, solid returns and strong capital.
- Management is leaning into shareholder returns, raising the dividend, resuming or expanding buybacks and setting more ambitious medium‑term targets.
- The U.S. AML saga is financially manageable but strategically significant: it will shape costs, growth and regulatory constraints for years, and remains the main reason TD trades at a valuation discount to many global peers.
For long‑term investors, TD today looks like a classic high‑quality, dividend‑paying bank that has largely recovered from a crisis but still carries a reputational and regulatory scar. Whether the stock is attractive at current levels depends on your view of three questions:
- How quickly TD can exit its monitorship and lift U.S. growth caps.
- Whether management can deliver on cost‑reduction and technology promises without eroding risk discipline.
- How much you value a 3–4% dividend yield and mid‑single‑digit to high‑single‑digit expected EPS growth relative to the risk of another macro or regulatory shock. [40]
References
1. td.mediaroom.com, 2. ca.finance.yahoo.com, 3. www.reuters.com, 4. fintel.io, 5. stories.td.com, 6. www.capitalbrief.com, 7. www.wsj.com, 8. www.marketbeat.com, 9. td.mediaroom.com, 10. td.mediaroom.com, 11. www.reuters.com, 12. td.mediaroom.com, 13. td.mediaroom.com, 14. td.mediaroom.com, 15. td.mediaroom.com, 16. td.mediaroom.com, 17. td.mediaroom.com, 18. www.capitalbrief.com, 19. stories.td.com, 20. stories.td.com, 21. www.wsj.com, 22. www.capitalbrief.com, 23. www.rttnews.com, 24. www.marketbeat.com, 25. www.tipranks.com, 26. www.tradingview.com, 27. stockanalysis.com, 28. www.benzinga.com, 29. tickernerd.com, 30. www.marketscreener.com, 31. www.gurufocus.com, 32. www.gurufocus.com, 33. www.gurufocus.com, 34. global.morningstar.com, 35. www.gurufocus.com, 36. www.marketbeat.com, 37. stories.td.com, 38. www.reuters.com, 39. www.reuters.com, 40. td.mediaroom.com
