TD Bank's Earnings Surge Can't Offset 4.5% Stock Slide as Trading Volume Slumps to 430th in Activity

On August 29, 2025, The Toronto-Dominion Bank (TD) reported a 3.14% surge in revenue to $15.6 billion and a 7.3% rise in adjusted earnings per share to $2.20, outperforming expectations. Despite robust results, the stock fell 4.5% amid profit-taking by long-term holders, with analysts citing concerns over U.S. loan growth and rising expenses in the American division. Trading volume dropped 52.25% to $220 million, ranking 430th in daily trading activity.

Analysts highlighted TD’s improved capital ratios and strong wealth management performance but noted persistent headwinds. National Bank Financial’s Gabriel Dechaine flagged “expense inflation” and regulatory costs as risks, while Scotia’s Mike Rizvanovic attributed the selloff to profit-taking after TD’s year-to-date outperformance. The bank maintained conservative credit loss provisions amid U.S.-Canada trade uncertainties, reserving $600 million for potential loan losses.

Price-to-earnings multiples fell to 13.7 for adjusted earnings and 10.9 for reported earnings, with a 0.17 PEG ratio. Analysts raised price targets, including Desjardins’ Doug Young to $110 and Rizvanovic to $104, though most maintained “sector perform” ratings pending clarity on strategic direction. TD’s shares remain undervalued relative to peers, with optimism centered on margin expansion and capital returns.

Backtest results indicated a 3.14% annualized return for TD over the past three years, with volatility metrics aligning with sector averages. The stock’s 4.5% decline on earnings was deemed irrational by some investors, who view the pullback as a buying opportunity amid its strong balance sheet and growth trajectory.