Toronto-Dominion Bank stock rating upgraded to Buy by Desjardins

Investing.com - Desjardins upgraded Toronto-Dominion Bank (TSX:TD) (NYSE:TD) from Hold to Buy on Wednesday, while raising its price target to C$107.00 from C$97.00. The bank’s stock has demonstrated strong momentum, delivering an impressive 42.7% return year-to-date according to InvestingPro data.

The upgrade comes as Desjardins noted significant improvement in the bank’s communication over the past six months, expressing approval of the messaging from TD’s management team.

Desjardins highlighted TD’s high-quality Canadian P&C banking operation with its strong deposit base as a key factor in the positive outlook for the financial institution.

The firm also pointed to proactive measures TD is taking ahead of its September investor day, including selling its Schwab stake and implementing share buybacks, as reasons for the more bullish stance.

While acknowledging that anti-money laundering remediation and U.S. asset cap remain risks, Desjardins noted these issues affect only approximately 25% of the bank’s earnings and are already well-known to investors, with potential for positive surprises in U.S. banking results in the coming year.

In other recent news, Toronto-Dominion Bank reported strong financial results for the second quarter of 2025, with earnings per share reaching $1.97, surpassing the forecasted $1.83. The bank’s revenue also exceeded expectations, coming in at $15.1 billion compared to the anticipated $13.61 billion. Following this positive earnings report, Jefferies raised its price target for Toronto-Dominion Bank to Cdn$103.00 from Cdn$95.00 and reiterated a Buy rating, citing the bank’s strong performance and successful U.S. restructuring efforts.

Additionally, Toronto-Dominion Bank has been placed under observation for four years by Norway’s $1.9 trillion sovereign wealth fund due to financial crime concerns. This decision was based on recommendations from an ethics council appointed by Norway’s ministry of finance. Despite these concerns, the bank’s Q2 results and strategic efforts have contributed to a positive market response. Investors remain attentive to these developments as they assess the bank’s ongoing performance and regulatory challenges.

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