TLDR
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TD Bank Surges on Q2 Beat, Closes at $67.28 with 3.86% Jump
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Toronto-Dominion Beats Q2 Forecast, Gains 21.7% YTD
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2,000 Jobs Cut as TD Streamlines for C$650M Annual Savings
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Jefferies Hikes TD Target to Cdn$103 After Earnings Beat
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TD Exits U.S. POS Lending, Adds C$13.9B from Schwab Sale
Toronto-Dominion Bank shares surged after the firm delivered better-than-expected earnings and announced significant restructuring steps. Investors responded positively, pushing the stock to a recent close of $67.28 after a 3.86% daily gain. The stock has now advanced 21.7% year-to-date, outperforming the S&P 500’s decline of 0.6%.
The Toronto-Dominion Bank (TD)
Strong Earnings Beat Lifts Investor Sentiment
Toronto-Dominion Bank posted adjusted earnings of $1.97 per share in Q2 2025, exceeding the average forecast of $1.83. Revenue reached $15.1 billion, beating consensus estimates of $13.61 billion, driven by strong trading and fee income. These figures supported a notable price jump following the earnings release.
The bank’s capital markets, wealth management, and insurance segments all recorded revenue growth during the quarter. The bank’s Common Equity Tier One (CET1) ratio stood strong at 14.9%, reinforcing its capital position. Additionally, the firm repurchased 30 million shares, enhancing shareholder value.
The bank also outperformed Zacks EPS and revenue estimates, reporting a consistent trend across three of the past four quarters. This performance signals operational consistency and investor confidence. However, analysts will closely watch how management adjusts future forecasts and capital deployment.
Restructuring Efforts and Workforce Reduction
Toronto-Dominion launched a cost-saving initiative to improve operational efficiency and streamline business lines. The plan includes a 2% workforce reduction, impacting roughly 2,000 global employees. The bank anticipates annual pre-tax savings of up to C$650 million from these efforts.
🚨 LAYOFF ALERT – Canada/US 🇨🇦🇺🇸
Toronto-Dominion Bank is laying off 2,000 employees (2% of workforce) as part of a restructuring plan announced May 2025. The move follows an anti-money laundering settlement and aims to cut costs and boost AI investments. pic.twitter.com/FRM7w5f26K
— The Layoff Tracker 🚨 (@WhatLayoff) May 22, 2025
The restructuring is part of a broader strategy under the new CEO’s leadership, aiming to reduce overhead and automate processes. The bank has already incurred C$163 million in pre-tax restructuring charges, covering real estate, severance, and business wind-downs. Consequently, the move is expected to improve long-term profitability and return on equity.
TD also exited its U.S. point-of-sale financing business to focus on its proprietary card operations. This strategic decision aligns with the bank’s objective to prioritize domestic operations. The transition supports a shift towards higher-margin segments and sustainable earnings growth.
Positive Analyst Outlook and Industry Positioning
Following the earnings beat, Jefferies raised its price target on TD stock to Cdn$103.00, reaffirming a Buy rating. The bank’s strong quarter, supported by lower provisions for credit losses, played a key role in the revised forecast. Jefferies cited TD’s improving capital levels and restructuring progress as positive indicators.
TD Bank belongs to the Zacks Banks – Foreign industry, currently ranked in the top 9% among 250+ industries. This classification indicates favorable industry positioning and growth prospects. Analysts also noted the bank’s strategic exit from U.S. operations as a potential catalyst for better domestic performance.
The bank will outline its revised medium-term targets at an Investor Day scheduled for September 29. With over 50 years of uninterrupted dividend payments and a current yield of 4.57%, TD remains attractive to income-focused investors. Its recent sale of a Charles Schwab stake added C$13.9 billion in capital, supporting buybacks and growth plans.
