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What's in Store for Toronto-Dominion (TD) in Q2 Earnings?
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The Toronto-Dominion Bank (TD - Free Report) is slated to announce second-quarter fiscal 2021 (ended Apr 30) results on May 27, before the opening bell. Both earnings and revenues are expected to have increased on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results were supported by higher non-interest income and decline in provisions. However, fall in loan balance and lower net interest income (NII) were 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 19.15%.
The Zacks Consensus Estimate for earnings has moved 5.3% upward over the past seven days to $1.39 per share, which indicates a surge of 120.6% from the prior-year reported number.
The consensus estimate for sales is pegged at $7.93 billion, suggesting a rise of 1% from the year-ago quarter.
Before we take a look at what our quantitative model predicts, let’s check out the factors that are expected to have impacted Toronto-Dominion’s fiscal second-quarter performance.
Factors at Play
Net Interest Income (NII): Demand for loans remained muted in the February-April quarter, mainly due to declining commercial lending. This, along with a low interest rate environment, is expected to have hampered the company’s NII growth.
Investment Banking Revenues: As economic and business activities have started to gradually resume, deal making continued at a faster pace in the to-be-reported quarter. So, with an increase in global M&A volumes, Toronto-Dominion’s advisory fees are likely to have been positively impacted.
Further, IPO activities were high in the to-be-reported quarter. Also, as companies continued to build liquidity, there was a rise in follow-up equity issuances. Moreover, bond issuance volumes were strong as companies took this as an opportunity to bolster their balance sheets. Hence, growth in Toronto-Dominion’s underwriting fees is likely to have been decent in the fiscal second quarter.
Trading Income: Driven by continued uncertainty over economic growth, equity markets witnessed a significant rise in volatility and higher client activity in the fiscal second quarter. Also, fixed income markets performance remained strong, mainly due to inflation concerns. Therefore, the company’s equity and fixed income markets revenues are expected to have improved in the to-be-reported quarter.
Provisions: Toronto-Dominion, having already built huge reserves owing to deterioration in the macro-economic backdrop in fiscal 2020, is less likely to have recorded a substantial increase in provision for loan losses in the fiscal second quarter.
What Our Model Says
We cannot conclusively predict that Toronto-Dominion will beat the Zacks Consensus Estimate 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 0.00%.
Bank of Montreal (BMO - Free Report) is scheduled to release quarterly numbers on May 26, while Royal Bank of Canada (RY - Free Report) and Canadian Imperial Bank of Commerce (CM - Free Report) will release results on May 27.
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Image: Bigstock
What's in Store for Toronto-Dominion (TD) in Q2 Earnings?
The Toronto-Dominion Bank (TD - Free Report) is slated to announce second-quarter fiscal 2021 (ended Apr 30) results on May 27, before the opening bell. Both earnings and revenues are expected to have increased on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results were supported by higher non-interest income and decline in provisions. However, fall in loan balance and lower net interest income (NII) were 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 19.15%.
Toronto Dominion Bank The Price and EPS Surprise
Toronto Dominion Bank The price-eps-surprise | Toronto Dominion Bank The Quote
The Zacks Consensus Estimate for earnings has moved 5.3% upward over the past seven days to $1.39 per share, which indicates a surge of 120.6% from the prior-year reported number.
The consensus estimate for sales is pegged at $7.93 billion, suggesting a rise of 1% from the year-ago quarter.
Before we take a look at what our quantitative model predicts, let’s check out the factors that are expected to have impacted Toronto-Dominion’s fiscal second-quarter performance.
Factors at Play
Net Interest Income (NII): Demand for loans remained muted in the February-April quarter, mainly due to declining commercial lending. This, along with a low interest rate environment, is expected to have hampered the company’s NII growth.
Investment Banking Revenues: As economic and business activities have started to gradually resume, deal making continued at a faster pace in the to-be-reported quarter. So, with an increase in global M&A volumes, Toronto-Dominion’s advisory fees are likely to have been positively impacted.
Further, IPO activities were high in the to-be-reported quarter. Also, as companies continued to build liquidity, there was a rise in follow-up equity issuances. Moreover, bond issuance volumes were strong as companies took this as an opportunity to bolster their balance sheets. Hence, growth in Toronto-Dominion’s underwriting fees is likely to have been decent in the fiscal second quarter.
Trading Income: Driven by continued uncertainty over economic growth, equity markets witnessed a significant rise in volatility and higher client activity in the fiscal second quarter. Also, fixed income markets performance remained strong, mainly due to inflation concerns. Therefore, the company’s equity and fixed income markets revenues are expected to have improved in the to-be-reported quarter.
Provisions: Toronto-Dominion, having already built huge reserves owing to deterioration in the macro-economic backdrop in fiscal 2020, is less likely to have recorded a substantial increase in provision for loan losses in the fiscal second quarter.
What Our Model Says
We cannot conclusively predict that Toronto-Dominion will beat the Zacks Consensus Estimate 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 0.00%.
Zacks Rank: The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Canadian Banks
Bank of Montreal (BMO - Free Report) is scheduled to release quarterly numbers on May 26, while Royal Bank of Canada (RY - Free Report) and Canadian Imperial Bank of Commerce (CM - Free Report) will release results on May 27.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>