TD Bank(TD:NYE) Credit Suisse re-initiates with Underperform on macro outlook uncertainty

STA Research
by: STA Research

Credit Suisse’s analyst Mike Rizvanovic today re-initiated TD Bank with a Underperform rating and C$59 target on the stock. Rizvanovic believes that TD is exposed to near-term macro headwinds and sees Schwab’s dip in revenue adding pressure to it’s overall earnings stream.

STA Research(stocktargetadvisor) has a average target of $66 on the stock, and a consensus Buy rating. STA’s  view of the stock is Slightly Bearish with a score of 4 out of 10, where 0 is very bearish and 10 very bullish.


What to like:
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Low debt
The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector.
Sometimes this is low because the company is not growing and has no growth potential.

What to not like:
Low market capitalization
This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.


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