Today we’re going to take a look at the well-established The Toronto-Dominion Bank (TSE:TD). The company’s stock saw a double-digit share price rise of over 10% in the past couple of months on the TSX. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Toronto-Dominion Bank’s outlook and value based on the most recent financial data to see if the opportunity still exists.
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Is Toronto-Dominion Bank still cheap?According to my valuation model, Toronto-Dominion Bank seems to be fairly priced at around 9.6% below my intrinsic value, which means if you buy Toronto-Dominion Bank today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$80.12, then there’s not much of an upside to gain from mispricing. Furthermore, Toronto-Dominion Bank’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will Toronto-Dominion Bank generate?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by a double-digit 17% over the next couple of years, the outlook is positive for Toronto-Dominion Bank. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in TD’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on TD, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Toronto-Dominion Bank. You can find everything you need to know about Toronto-Dominion Bank in the latest infographic research report. If you are no longer interested in Toronto-Dominion Bank, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.