Jefferies upgrades TD Bank, names bank top pick for 2025
The path ahead for Toronto-Dominion Bank is rocky, but analysts at Jefferies Financial Group Inc. are predicting a recovery in the stock’s valuation as they turn bullish on the outlook for the Canadian lender and name it a top pick for 2025.
Analysts led by John Aiken upgraded Canada’s second-largest bank to buy from hold and raised their price target on the stock to $90. While Aiken doesn’t see a rebound in valuation happening in the near term, he expects it to improve as 2025 progresses.
“The challenges are not insurmountable, and we anticipate that several questions will be answered over the next year and believe that TD’s multiple will recover some lost ground,” Aiken wrote in a note published Thursday. “We are already seeing TD’s valuation rebound as investors attempt to pick the bottom.”
Toronto-Dominion has had a difficult 2024, with U.S. money-laundering probes weighing on the stock. The company resolved those cases in October, pleading guilty to failing to prevent money laundering by drug cartels and other criminals. It also agreed to pay almost US$3.1 billion in fines and other penalties, and faces a cap on its American assets. The lender last week suspended medium-term financial targets amid a review of company strategy as the incoming chief executive officer, Raymond Chun, seeks to move past the settlement.
Shares in Toronto-Dominion rose 0.4 per cent in Toronto on Thursday, extending gains for a fourth straight session. The stock now has six buy recommendations, seven holds and two sells among analysts tracked by Bloomberg. With 2024 drawing to a close, Toronto-Dominion is not only on track to end the year as the worst performer among Canada’s Big Six banks, but the lender is also set to have its worst year
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