Our answers may be bland but that is because there has not really been any really material recent news. Stocks will decline often with no particular reason. Investors like to 'look' for reasons but there can't ever be any comformation that the reason noted is even the reason for the move. The sector is off to a weak start of the year but TD is down 3.9% in 52 weeks (less with the dividend) and we would hardly consider that particularly noteworthy. The TSX financial sector is down 2% YTD. The bank has 103,000 employees--there are going to be some bad apples in that size group. EPS did miss estimates by 3.7% last quarter. Toronto-Dominion Bank doesn't see a path to reaching 7-10% EPS growth and 16% a return on equity in 2024 -- reflected in consensus. Achieving positive operating leverage this year might also be a challenge as management expects mid-single-digit expense growth vs. its 2% goal, mostly due to risk and control investments. These costs could be almost C$500 million annually and persist into 2025. Revenue upside may be limited as loan growth could be muted and the bank projects stabilizing net interest margin. Provisions may rise, reaching related ratio guidance of 40-50 bps in 2024. TD's restructuring actions could pare 2024 expenses by C$400 million and by C$600 million over time (with full implementation), yet required a C$363 million 4Q charge, which may be matched in 1H. We still like it at 10X earnings, exposure to US economic growth, and a secure 5%+ dividend.
5i Research Answer: