Shares of Toronto-Dominion Bank (TSX: TD) have gone through a major comeback in 2025. After struggling in 2024, TD stock managed to gain back investors’ confidence with a mix of strong earnings, strategic updates, and a market-friendly shift in interest rate expectations. While its performance in the past year wasn’t smooth, long-term investors who stuck around have been rewarded with a sharp rise in share price and a healthy dividend payout along the way. But the real question now is whether this upward momentum can continue into 2026 or if this is where investors should take a breather.
In this article, I’ll talk about some key fundamentals that are driving TD Bank stock’s recent performance, the real numbers behind its recovery, and why I believe this stock could still have more room to grow heading into 2026.
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TD Bank stock’s performance in 2025
TD’s stock, now trading at $114.46 per share, has gained nearly 50% so far in 2025, rewarding patient investors with solid returns. Its market cap now stands at $194.2 billion, helping it comfortably maintain its position as the second-largest bank in Canada. The stock also offers a dependable quarterly dividend with an annualized yield of 3.7% at the current market price.
TD’s recent comeback isn’t just a quick recovery but a sign of improving sentiment, supported by solid earnings, easing interest rates, and its clearer long-term outlook.
Earnings are moving in the right direction again
TD Bank operates across Canada and the U.S., offering personal and commercial banking, wealth management, insurance, and wholesale banking. In the third quarter of its fiscal year 2025 (ended in July), the bank’s adjusted net income rose 5.8% YoY (year-over-year) and 10.4% sequentially to $3.78 billion. This growth was mainly driven by higher revenues in its Canadian personal and commercial banking segment.
Notably, TD’s quarterly revenue rose by nearly 8% YoY to $15.3 billion, backed by stronger loan volumes and continued strength in its domestic banking operations.
On a trailing 12-month basis, TD’s total revenue rose 7.1%, although its adjusted earnings were nearly flat. So, while its earnings have not surged at the same pace, this could set the stage for margin expansion as cost controls take hold and credit conditions continue to improve.
Could TD’s comeback continue into 2026?
In September, TD laid out a clear roadmap for growth as it continues to focus on four major areas. These areas include enhancing its North American retail franchise, expanding customer relationships, driving efficiency through technology, and maintaining strong capital levels. Its Canadian business continues to be a cash generator, while the U.S. segment remains key to its long-term vision. While the bank’s plans to grow its U.S. market share through organic investments and digital tools may take time, its focus is in the right place.
Another important factor that could support TD’s financial growth in 2026 is the easing interest rate environment on both sides of the border. As borrowing costs come down, demand for loans could pick up, which may boost the bank’s interest income and drive stronger earnings in its retail and commercial segments.
Meanwhile, the company is also maintaining a disciplined approach to risk, with strong liquidity ratios and capital buffers that easily meet regulatory expectations. Add in its steady dividend and rising investor sentiment, and TD looks like a dependable stock that long-term investors might still want to keep in their portfolios as 2026 approaches.
