TD
The Toronto-Dominion Bank
$111.87
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 10.9% below fair value
You pay
$111.87
Bear
$86.03
Fair
$125.52
Bull
$149.21
Bear
$86.03
-23.1%
ROTCE 14.6% → 2.09x TBV
Fair
$125.52
+12.2%
ROTCE 19.5% → 3.04x TBV
Bull
$149.21
+33.4%
ROTCE 22.4% → 3.62x TBV
Key Value Driver
ROTCE (19.5%) vs. cost of equity (9.1%)
Implied Market Multiple
2.48x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $89.52 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $125.52 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $49.69 (64% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $89.52 (from 17 analysts). Our estimate is 54% above the consensus -- consider that gap carefully.
Financial statements were converted from CAD into USD using USDCAD at 0.7239 USD per CAD.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly