The Toronto-Dominion Bank (TD - Free Report) is slated to announce fourth-quarter and full-year fiscal 2022 (ended Oct 31) results on Dec 1, before the opening bell. The company’s quarterly earnings are expected to have decreased on a year-over-year basis.
In the last-reported quarter, Toronto-Dominion’s earnings were supported by an increase in net interest income on the back of higher interest rates and rising loan demand. However, an increase in expenses, a fall in non-interest income and higher provision for credit losses were major headwinds.
Toronto-Dominion has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 5.39%.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings has been revised to 2% lower over the past seven days to $1.50 per share. This indicates a decline of 9.6% from the prior-year reported number.
Major Factors at Play
Net Interest Income (NII): Overall demand for loans improved in the August-October quarter. Further, the Bank of Canada raised the interest rates twice during the quarter, bringing the policy rate to 3.75%. Thus, higher interest rates and decent loan demand are expected to have supported Toronto-Dominion’s NII.
Investment Banking Revenues: Deal-making continued to slow down in the fiscal fourth quarter as the ongoing Russia-Ukraine conflict and raging inflation numbers weighed on business sentiments globally. Thus, Toronto-Dominion’s advisory fees are likely to have been adversely impacted.
Similarly, the IPOs and follow-up equity issuances dried up as equity market performance turned disappointing. Also, bond issuance volume was muted. Hence, Toronto-Dominion’s underwriting fees are likely to have been adversely impacted in the fiscal fourth quarter.
Trading Income: Due to persistent macroeconomic and geopolitical issues, equity markets witnessed a significant rise in volatility and higher client activity in the fiscal fourth quarter. Also, fixed-income markets’ performance remained decent amid concerns related to inflation. Thus, Toronto-Dominion’s trading revenues are likely to have been impressive in the to-be-reported quarter.
Provisions: With the rise in loan balance and expectations of economic slowdown due to geopolitical and inflation concerns, Toronto-Dominion is expected to have built reserves in the fiscal fourth quarter.
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Toronto-Dominion this time around. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Toronto-Dominion is -1.33%.
Zacks Rank: The company currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Barclays (BCS - Free Report) reported third-quarter 2022 net income attributable to ordinary equity holders of £1.51 billion ($1.78 billion), up 10% from the prior-year quarter.
Barclays’ quarterly results were aided by a rise in revenues, partly offset by higher expenses. In the reported quarter, the company recorded a substantial year-over-year rise in credit impairment charges.
HSBC Holdings (HSBC - Free Report) reported a third-quarter 2022 pre-tax profit of $3.1 billion, down 41.8% from the prior-year quarter.
Results reflected a rise in adjusted revenues. However, adjusted expenses increased from the year-ago quarter, which was a headwind for HSBC. The expected credit losses and other credit impairment charges were a net charge in the quarter under review against a release in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The Toronto-Dominion Bank (TD - Free Report) is slated to announce fourth-quarter and full-year fiscal 2022 (ended Oct 31) results on Dec 1, before the opening bell. The company’s quarterly earnings are expected to have decreased on a year-over-year basis.
In the last-reported quarter, Toronto-Dominion’s earnings were supported by an increase in net interest income on the back of higher interest rates and rising loan demand. However, an increase in expenses, a fall in non-interest income and higher provision for credit losses were major headwinds.
Toronto-Dominion has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 5.39%.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings has been revised to 2% lower over the past seven days to $1.50 per share. This indicates a decline of 9.6% from the prior-year reported number.
Major Factors at Play
Net Interest Income (NII): Overall demand for loans improved in the August-October quarter. Further, the Bank of Canada raised the interest rates twice during the quarter, bringing the policy rate to 3.75%. Thus, higher interest rates and decent loan demand are expected to have supported Toronto-Dominion’s NII.
Investment Banking Revenues: Deal-making continued to slow down in the fiscal fourth quarter as the ongoing Russia-Ukraine conflict and raging inflation numbers weighed on business sentiments globally. Thus, Toronto-Dominion’s advisory fees are likely to have been adversely impacted.
Similarly, the IPOs and follow-up equity issuances dried up as equity market performance turned disappointing. Also, bond issuance volume was muted. Hence, Toronto-Dominion’s underwriting fees are likely to have been adversely impacted in the fiscal fourth quarter.
Trading Income: Due to persistent macroeconomic and geopolitical issues, equity markets witnessed a significant rise in volatility and higher client activity in the fiscal fourth quarter. Also, fixed-income markets’ performance remained decent amid concerns related to inflation. Thus, Toronto-Dominion’s trading revenues are likely to have been impressive in the to-be-reported quarter.
Provisions: With the rise in loan balance and expectations of economic slowdown due to geopolitical and inflation concerns, Toronto-Dominion is expected to have built reserves in the fiscal fourth quarter.
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Toronto-Dominion this time around. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Toronto-Dominion is -1.33%.
Zacks Rank: The company currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Barclays (BCS - Free Report) reported third-quarter 2022 net income attributable to ordinary equity holders of £1.51 billion ($1.78 billion), up 10% from the prior-year quarter.
Barclays’ quarterly results were aided by a rise in revenues, partly offset by higher expenses. In the reported quarter, the company recorded a substantial year-over-year rise in credit impairment charges.
HSBC Holdings (HSBC - Free Report) reported a third-quarter 2022 pre-tax profit of $3.1 billion, down 41.8% from the prior-year quarter.
Results reflected a rise in adjusted revenues. However, adjusted expenses increased from the year-ago quarter, which was a headwind for HSBC. The expected credit losses and other credit impairment charges were a net charge in the quarter under review against a release in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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