Toronto-Dominion Bank Stock Downgraded (TD)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Toronto-Dominion Bank (NYSE: TD) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • TD's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 2.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market, TORONTO DOMINION BANK's return on equity exceeds that of both the industry average and the S&P 500.
  • In its most recent trading session, TD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has significantly decreased to $898.00 million or 87.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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The Toronto-Dominion Bank, together with its subsidiaries, provides financial and banking services in North America and internationally. The company's Canadian Personal and Commercial Banking segment offers various financial products and services to personal and small business customers. The company has a P/E ratio of 11.8, below the S&P 500 P/E ratio of 17.7. Toronto-Dominion has a market cap of $76.93 billion and is part of the financial sector and banking industry. Shares are down 2.1% year to date as of the close of trading on Tuesday.

You can view the full Toronto-Dominion Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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