Toronto-Dominion Bank (TD) — record Q3 and a >C$13B FY27 capital-return path; +59% in a year

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The short version: record earnings, already in the price?

Toronto-Dominion Bank (TSX: TD), Canada’s second-largest bank by market value, traded at CA$170.37 on the September 18, 2026 screener, after a run of about 59% over twelve months — the best one-year move among the Big Five. Over the last month it slipped about 1%. The story has flipped from remediation overhang to record earnings and capital return: a record fiscal third quarter, a path to hand back more than C$13B in fiscal 2027, and a plan for about 100 new U.S. branches by 2028.

At about 18x trailing earnings and with the average analyst target near C$171, roughly level with the share price, the question for a new buyer is how much of that good news the re-rating has already captured. Below we go through the Q3 print, the capital-return math and the U.S. plan, and how TD compares with its Big Five peers — RBC, BMO, Scotiabank and CIBC — on size, returns, valuation, dividends and analyst targets.

What happened: a record Q3 and a C$13B capital-return path

On August 27, 2026, TD reported fiscal Q3 (the quarter ended July 31, 2026). The headline numbers:

• Adjusted net income about C$4.7B and adjusted diluted EPS of C$2.77, up about 21% and 26% year over year — a record on both lines.
• Reported net income C$4.6B and EPS of C$2.74, up from C$3.3B and C$1.89 a year earlier.
• Adjusted revenue up about 8% and adjusted ROE near 16% (reported ROE 15.8%).
• CET1 ratio of 14.3% after buying back about 14.5M shares in the quarter.
• Provisions for credit losses guided toward the low end of the 40–50 basis-point fiscal 2026 range, and a fifth straight quarter of positive operating leverage.

On the call, CEO Raymond Chun said that, with continued organic capital accretion and risk-weighted asset growth in line with fiscal 2026 so far, TD could return over C$13B of capital in fiscal 2027, mostly through buybacks and on top of the dividend, to bring CET1 down toward about 13%. Management’s order of priorities stays the same: organic growth first, selective fee-income acquisitions second, and returning excess capital third. The C$13B figure is an illustration, not a commitment — it depends on how much capital the bank keeps generating and how fast its balance sheet grows.

The U.S. branch plan and the remediation backdrop

U.S. Banking outlined a plan to open about 100 new U.S. branches by the end of 2028, with most openings weighted to 2028, densifying East Coast markets and expanding in Florida and the Carolinas. The plan is subject to regulatory approval, and management repeated that anti-money-laundering (AML) remediation remains priority number one. In Q3 the U.S. segment earned about C$1.07B (US$771M) on a reported basis, with adjusted net income up about 12% and a reported segment ROE of 10.2%.

That last figure is the weak spot. A U.S. return on equity near 10% still trails TD’s Canadian business by a wide margin, and the branch build adds costs before it adds revenue. The capital-return story is strong, but the U.S. franchise is where execution and regulatory risk sit — and where the valuation discussion below gets more nuanced.

Business overview: TD vs the Big Five banks

TD runs four main businesses: Canadian personal and commercial banking (its biggest earner), U.S. retail banking along the East Coast, wealth management and insurance, and wholesale banking through TD Securities. The Canadian bank and wealth arms provide steady, fee-rich earnings; the U.S. bank, credit costs and capital markets are the swing factors.

On the TSX screener, TD sits in the Finance sector, and the natural comparison is the rest of the Big Five. RBC (RY) is the largest Canadian bank and the benchmark on profitability. BMO (BMO) has the other big U.S. footprint. Scotiabank (BNS) is the international-focused lender, and CIBC (CM) is the most Canada-centred of the group. Insurers, smaller banks and asset managers in the sector were left out because their business mix is not comparable.

Overview table

Company (Ticker)	Price	Market cap	Revenue (LTM)	Net income (LTM)
TD Bank (TD)	$170.37	$287.8B	$113.0B	$16.2B
Royal Bank (RY)	$284.93	$395.1B	$141.5B	$22.7B
Bank of Montreal (BMO)	$243.24	$169.0B	$77.6B	$9.15B
Scotiabank (BNS)	$131.66	$162.3B	$70.5B	$10.0B
CIBC (CM)	$159.05	$144.4B	$62.4B	$10.1B
Average (incl. TD)	—	$231.7B	$93.0B	$13.6B

Source: TSX screener (September 18, 2026, tsx-2026-09-18.csv) · CAD · LTM = last 12 months. Average includes TD; blank cells skipped.

TD is the second-largest bank in the group at about C$288B of market value, behind RBC’s C$395B, with about C$113B of trailing revenue and C$16.2B of net income. BMO, Scotiabank and CIBC are each about half to three-fifths of TD’s market value, so TD’s scale is firmly Big Five core.

Performance: the best one-year run among the banks

Performance table

Company (Ticker)	1M	3M	6M	1Y	5Y	10Y
TD Bank (TD)	−1.1%	+1.0%	+32.5%	+59.2%	+106%	+198%
Royal Bank (RY)	−4.9%	−0.7%	+29.7%	+41.6%	+121%	+255%
Bank of Montreal (BMO)	−5.6%	+0.7%	+30.4%	+36.2%	+89.7%	+186%
Scotiabank (BNS)	+4.3%	+7.1%	+39.6%	+47.9%	+68.5%	+90.7%
CIBC (CM)	−7.1%	+0.3%	+21.4%	+44.0%	+116%	+213%
Average (incl. TD)	−2.9%	+1.7%	+30.7%	+45.8%	+100%	+189%

Source: TSX screener (September 18, 2026). Average includes TD; blank cells skipped. Price change by window.

Over twelve months TD is up about 59%, ahead of Scotiabank (about 48%), CIBC (44%), RBC (42%) and BMO (36%). The whole group re-rated, with every bank up more than a third, but TD’s lead reflects the recovery from its remediation discount as much as the sector tide. Over the last month TD dipped about 1%; Scotiabank was the only bank in the green.

Over longer windows TD is up about 106% in five years and 198% in ten, close to the group averages of about 100% and 189%. RBC has the best ten-year record at about 255%.

Valuation: no longer the cheap bank

Valuation table

Company (Ticker)	P/E	Fwd P/E	PEG	P/S	P/B	P/FCF	Price/Cash
TD Bank (TD)	18.27	15.60	—	4.26	2.45	5.94	—
Royal Bank (RY)	17.97	16.39	0.90	5.47	2.95	11.98	—
Bank of Montreal (BMO)	19.83	15.15	2.63	4.45	2.15	2.03	—
Scotiabank (BNS)	17.20	14.24	0.36	4.15	2.03	7.15	—
CIBC (CM)	15.28	14.44	0.59	4.57	2.44	4.99	—
Average (incl. TD)	17.71	15.16	1.12	4.58	2.40	6.42	—

Source: TSX screener (September 18, 2026). Average includes TD; blank cells skipped. Highlighted = lowest (cheapest) positive value per column.

At about 18.3x trailing earnings and 15.6x forward, TD trades slightly above the group averages of about 17.7x and 15.2x. CIBC screens cheapest on trailing P/E (about 15.3x), and Scotiabank is lowest on forward P/E, PEG, price to sales and price to book. TD’s price to book of about 2.45x sits a little above the 2.40x average, which is the clearest sign that the discount the market used to apply to TD has closed.

Bank price-to-free-cash-flow figures swing with deposits and lending flows, so they say little here; BMO’s 2.0x is the lowest, but it is not a useful signal. The real question for TD’s multiple is whether earnings keep growing fast enough — through buybacks and the U.S. recovery — to justify a premium to CIBC and Scotiabank rather than a discount.

Dividend: mid-pack yield, buybacks do the heavy lifting

Dividends table

Company (Ticker)	Dividend / share	Yield	Payout ratio
TD Bank (TD)	$4.20	2.58%	46.3%
Royal Bank (RY)	$6.04	2.47%	41.4%
Bank of Montreal (BMO)	$6.44	2.81%	54.3%
Scotiabank (BNS)	$4.32	3.46%	57.5%
CIBC (CM)	$3.88	2.69%	39.8%
Average (incl. TD)	$4.98	2.80%	47.9%

Source: TSX screener (September 18, 2026). Average includes TD; blank cells skipped. Yield = indicated.

TD pays C$4.20 a year on the screener (trailing; the current quarterly rate of C$1.12 annualizes to about C$4.48), for an indicated yield near 2.6% and a payout of about 46% of earnings. That is close to the group averages of 2.8% and 48%. Scotiabank offers the highest yield at about 3.5%, with the highest payout near 58%. TD’s dividend is well covered, but at this price the total-return story is about buybacks more than a big yield.

Analyst view: the consensus has been caught

Analyst table

Company (Ticker)	Rating	Price	Target 1Y	Upside	Analysts
TD Bank (TD)	Buy	$170.37	$171.08	+0.4%	11
Royal Bank (RY)	Buy	$284.93	$302.43	+6.1%	—
Bank of Montreal (BMO)	Neutral	$243.24	$254.57	+4.7%	—
Scotiabank (BNS)	Buy	$131.66	$132.86	+0.9%	—
CIBC (CM)	Buy	$159.05	$155.04	−2.5%	—
Average (incl. TD)	—	—	—	+1.9%	—

Rating & price: TSX screener (September 18, 2026). Target 1Y: MarketBeat / stockanalysis consensus, pulled 2026-09-23: TD C$171.08 (about 11 analysts), RY C$302.43, BMO C$254.57, BNS C$132.86, CM C$155.04 (peer analyst counts not recorded). Upside = target ÷ price − 1.

The screener rates TD a Buy, and MarketBeat’s consensus is Moderate Buy from about 11 analysts, with an average one-year target near C$171.08 — only about 0.4% above the C$170.37 price. The spread is wide: National Bank Financial lifted its target to C$196 and kept Outperform (August 30), Canaccord also sits at C$196, CIBC at C$188 and Desjardins at C$183 with a Buy, while Barclays stays Underweight with a target near C$167 (August 28). Across the Big Five the average upside to consensus is only about 2%, and CIBC already trades above its target — the whole group has caught up with the Street after the re-rating.

Why it matters: from remediation overhang to capital return

The old narrative was TD as a bank in the penalty box: AML remediation and a softer U.S. print, priced at a discount to its peers. The new narrative is record earnings, CET1 flexibility and an explicit capital-return illustration, plus a multi-year plan to densify the U.S. branch network.

Income investors still collect a mid-2% yield with a sub-50% payout. Total-return investors care whether the C$13B-plus return math and the 100-branch plan survive credit costs, balance-sheet growth and regulatory gates. The open question is whether TD can turn its excess capital into faster per-share growth now that the market no longer prices it at a discount.

Bull case

1. Earnings power. A record Q3 — adjusted net income of about C$4.7B, EPS up 26%, revenue up 8% and ROE near 16% — gives cover for big capital returns.
2. Excess capital. CET1 at 14.3% and a path to return over C$13B in fiscal 2027 point to heavy buybacks on top of the dividend.
3. U.S. reinvestment and Street support. The 100-branch plan adds a growth leg, and the most bullish targets reach C$196, about 15% above the price.

Bear case and risks

1. Already priced. After a 59% one-year run, the average target of about C$171 sits roughly at the share price.
2. Conditional plans. The C$13B return depends on capital accretion and contained risk-weighted asset growth, and the U.S. branches need regulatory approval while AML remediation continues.
3. Credit and U.S. execution. Provisions are guided lower but not to zero, and a U.S. ROE near 10% still trails the Canadian bank.

What to watch

1. Fiscal Q4 and full-year results. Whether adjusted ROE holds near the mid-teens and provisions stay at the low end of the 40–50 basis-point guide.
2. Fiscal 2027 buyback pace versus the CET1 path toward about 13%.
3. Regulatory progress on the U.S. branch openings and AML remediation milestones.
4. Analyst targets. Whether the consensus moves up toward the C$183–C$196 bullish cluster or the stock drifts back toward the Underweight view in the mid-C$160s.

Bottom line

TD has earned its re-rating: record adjusted earnings, a fifth straight quarter of positive operating leverage, a 14.3% CET1 ratio and a credible plan to return more than C$13B in fiscal 2027. The U.S. branch plan adds a longer-term growth leg, but it comes with regulatory strings and a remediation programme still under way. The issue is price. At about 18x trailing earnings, above the Big Five average, and level with the consensus target after a 59% run, much of the turnaround is already in the stock. The next test is whether buybacks and U.S. execution deliver the per-share growth the multiple now assumes.

Video chapters

• 0:00 Hook — record Q3, >$13B capital return
• 0:18 What happened: Q3 print, capital return and U.S. branches (August 27)
• 1:14 Overview — Big Five peers
• 1:39 Performance heatmap
• 1:59 Valuation (~18x P/E)
• 2:18 Dividends
• 2:37 Analyst ratings & targets
• 3:03 Why it matters
• 3:29 Bull case
• 3:47 Bear case
• 4:11 What to watch

Data notes

Table figures are TSX screener values (merge tsx-2026-09-18.csv, 2,566 rows; CAD). Peers are the rest of the Big Five banks in the Finance sector: RBC (largest bank), BMO (the other big U.S. footprint), Scotiabank (international) and CIBC (Canada-focused); insurers, smaller lenders and asset managers were skipped as not comparable. Average rows include TD and skip blank cells. Forward P/E comes from the same screener merge (it was not shown in the video’s valuation still); PEG is blank for TD and Price/Cash is blank for all five banks in this merge. Target 1Y is MarketBeat / stockanalysis consensus pulled 2026-09-23 (TD about 11 analysts; peer analyst counts were not recorded, so those cells are blank). Q3 figures and the capital-return and branch commentary are from TD’s August 27, 2026 release and earnings call. Video chapter times come from the rendered video’s section timings.

Sources

• TD Bank Group Q3 2026 results release, August 27, 2026, and Q3 investor presentation
• TD Q3 2026 earnings call — capital-return commentary (over C$13B in fiscal 2027) and the ~100 U.S. branch plan
• MarketBeat and stockanalysis.com — TD consensus and broker targets (National Bank Financial, Canaccord, CIBC, Desjardins, Barclays); RY, BMO, BNS and CM consensus (pulled September 23, 2026)
• TSX screener merge September 18, 2026 (2,566 rows)

Media credits

TD logo (company trademark, used for identification). Unsplash: stock photos of an office tower, a bank branch exterior and a city skyline (Unsplash License). The capital-return chart and the data tables were built in-house. No AI-generated images were used.

By Andrew · stocksummarizer.com