Toronto-Dominion Bank (TSX:TD)(NYSE:TD) stock was mostly flat a day after the release of its third-quarter 2019 results. Shares had dropped 7% over the past month in anticipation of its earnings report. TD Bank’s narrow margins spooked analysts in the third quarter, but positive news on the domestic front has generated momentum for TD and its peers.
The Canadian economy expanded 3.7% in the second quarter, which was the strongest quarterly growth seen in two years. It achieved this on the back of strong exports and robust growth in energy products, farming and fishing products, non-metallic minerals, and aircraft products. The number blew away expectations. Still, TD has warned that headwinds are a concern looking ahead to Q4.
TD’s U.S. Banking segment has fueled earnings growth in recent quarters, which is why a rebound on the domestic front is encouraging.
Its U.S. Retail segment posted adjusted net income of $1.28 billion which was up 11% from the prior year. Growth has slowed somewhat since peaking after U.S. tax reform. Still, the economy south of the border remains prosperous, if more fragile in late 2019.
Shares of TD boast a P/E ratio of 11.5 and a price-to-book of 1.6, placing it on comparable footing to its industry peers. The stock had an RSI of 35 at the time of this writing, putting it just outside of technically oversold territory.
Broader headwinds make TD Bank a hold right now, but investors should monitor the price action and be ready to pull the trigger if it approaches a more discounted level.
