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๐ Maple Market Challenge 16: Paying a $3.09 billion fine. Is TD stock still a buy for 2025?
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Recently, $The Toronto-Dominion Bank (TD.CA)$ has settled a money laundering case by agreeing to pay a $3.09 billion fine. This includes a $1.3 billion penalty to the US Treasury and $1.8 billion to the US Justice Department, along with a guilty plea for violating the Bank Secrecy Act. The bank had already set aside provisions for this payment, making the financial risk manageable.
However, concerns have arisen due to the U.S. Office of the Comptroller of the Currency's asset cap on TD's U.S. retail division, affecting 30% of its total assets. This cap limits TD's ability to grow its loan and market share in the U.S., and analysts estimate it could reduce TD's 2025 EPS by 25-30 basis points. RBC has adjusted its target price for TD to C$82, citing the asset cap as a significant factor limiting growth and strategic flexibility.
$The Toronto-Dominion Bank (TD.CA)$ has underperformed some of its Canadian banking peers in the past two years. Do you think TD stock is now still undervalued and good to buy?
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102362254 : While it's unclear if $The Toronto-Dominion Bank (TD.CA)$ is still undervalued, investors should carefully consider ongoing regulatory scrutiny and economic conditions. For those with a long-term outlook and tolerance for volatility, TD may still be worth exploring, especially as it presents a potential buying opportunity with a good dividend yield
YOHO3318 : looking at the historical P/B ratio, TD is currently trading within its historical average P/B although its cheaper than its peers.
Antonio Sze-To : The regulatory order has limited the asset growth for TD. This has changed the fundamental structure of the bank. I donโt think it is undervalued from this moment. Buying now means you are betting that TD will recover from all these setbacks. I wonโt buy now and I will wait for a better entry.
Roldens Julien : will it go lower than 50?
Andrew0904 : I am not sure of the percentage of TD usa within TD as a whole, so I cannot determine how much impact the American National Bankshares has on the asset ceiling of TD Bank's retail department in the usa.
Fenglinshanhuo : Although TD's business in Canada and the usa is not the best, it still has investment value. This fine is indeed a significant loss, but it can prompt TD to address regulatory loopholes.
COCO 2024 : Other banks in history have faced similar issues, such as BMO, which has now started to rise. Regulatory orders have limited TD's asset growth. But based on the fundamental structure of banks, I believe it is currently undervalued. I am now willing to buy TD and take advantage of this opportunity.
72149113 : When all the bad news is out, it is usually a good time to buy for the long run
I doubled down yesterday, with a 5.4% dividend they are paying me to wait
Living Stone : what Antonio said
... TD might have settled the law suit but the cap means they will have to restructure which will take some time, effort and practice to perfect... better to save your money and wait for a clear signal of upward momentum otherwise your investment can just sit there doing nothing or worse going down for a long time before it ever goes up.
Moomoo CA OP :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
More to read: Here's How Analysts Weigh in on TD's Massive Fine and Asset Cap (moomoo.com/comm...)
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