TD (TSX:TD) Stock: Why the Bank Surged 7% This Month

TD (TSX:TD)(NYSE:TD) stock is up 7% in the last month and 30% year to date. But more growth could be on the way, especially long term.

| More on:
stocks rising

Image source: Getty Images

Motley Fool investors aren’t necessarily used to the Big Six banks surging. Yet that’s exactly what happened during the last month with Toronto-Dominion Bank (TSX:TD)(NYSE:TD). Shares of TD stock have climbed 7% in the last month, jumping just as earnings come around the corner.

What happened?

The jump occurred after a slew of announcements from TD stock. The first was the announcement that earnings would be released Dec. 2, as predicted. But then several more announcements came down the line. The first two were normal, with TD announcing its ETF distributions and annual reinvestment. TD stock was also nodded at for four mutual fund awards and was one of the most sustainable companies.

These are all great buzzwords, but the big push was likely a number of analyst upgrades. Shares of TD continue to trade at about $93 per share. However, many analysts started bumping target prices to the three-digit range. This would mark the first time TD stock reached the three-digit level!

What analysts are saying

TD stock continued to be a top pick amongst the Big Six banks for analysts. TD stock remains a solid choice thanks to inflation, customer activity, rising interest rates, and, of course, the push in dividend hikes and buybacks. All of this combined creates a situation where the company is likely to outperform, even in the banking sector.

Part of this comes down to the reshuffle in leadership, with a new boss in the U.S. sector of TD. This could energize its strategy out of the pandemic, creating further U.S. opportunities, along with its already booming U.S. and online sector. This could, in fact, include some mergers and acquisitions in the U.S., according to analysts.

Should investors buy TD stock?

There are a few obvious reasons by analysts continue to recommend TD stock as a buy. This growth will fuel double-digit dividend hikes — something all Motley Fool investors should see from the banks. But furthermore, this stock is certainly headed towards the three-digit range.

When (not if, when) that happens, there should be a boost from hitting that achievement. This could send shares up even higher right before the end of 2021. And given its trajectory over the last few decades, TD stock isn’t likely to come back down again.

So, with a dividend hike in store and a potential upside to over $100 per share, TD stock is certainly one to consider for long-term investors. And the best news? It remains a value stock. You can currently pick up TD stock with a P/E ratio of just 11.26 and a 3.32% dividend yield.

Shares are up 30% year to date, compared to the TSX up 18%. TD stock will report its fourth-quarter earnings on Dec. 2, 2021, before market open. Analysts currently estimate TD to report earnings per share of $1.94. Last quarter, it beat earnings estimates by four cents, reporting $1.98, above the predicted $1.92.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of TORONTO-DOMINION BANK. The Motley Fool has no position in any of the stocks mentioned.

More on Bank Stocks

Young woman sat at laptop by a window
Bank Stocks

Could BMO Stock Be a Big Winner in 2023?

Long-term investors should take a closer look at BMO stock as a potential core holding, especially on dips.

Read more »

Tech Stocks

TFSA Passive Income: How I’m Investing to Make $2,000/Year From Dividends

I am increasing my dividend income by investing in dividend stocks like the Toronto-Dominion Bank.

Read more »

Make a choice, path to success, sign
Bank Stocks

Of the Big 6 Bank Stocks: Buy This, Not That

CIBC (TSX:CM) is an interesting Big Six bank stock to buy right now.

Read more »

question marks written reminders tickets
Bank Stocks

Could BNS Stock Be a Big Winner in 2023?

Bank of Nova Scotia stock still appears oversold. Is now the right time to buy?

Read more »

Gold medal
Bank Stocks

Could TD Stock Be a Big Winner in 2023?

TD stock is still down from the 2022 highs. Is this a good time to buy?

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Is Now the Right Time to Buy Banking Stocks?

TD Bank stock is still riding high, despite the very difficult environment that it and all banking stocks are facing…

Read more »

Payday ringed on a calendar
Bank Stocks

How to Create $500 in Passive Income Each and Every Month

Combining your TFSA with a covered call ETF can create some very lucrative passive-income streams.

Read more »

woman data analyze
Bank Stocks

BNS Stock: Here’s What’s Coming in 2023

Here's what investors and market participants should look for in 2023 when it comes to Bank of Nova Scotia (TSX:BNS)…

Read more »