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What's in Store for Toronto-Dominion (TD) in Q4 Earnings?
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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).
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.
Image: Bigstock
What's in Store for Toronto-Dominion (TD) in Q4 Earnings?
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%.
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 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.