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What Is The Toronto-Dominion Bank's (TSE:TD) Share Price Doing?

Simply Wall St

Let's talk about the popular The Toronto-Dominion Bank (TSE:TD). The company's shares maintained its current share price over the past couple of month on the TSX, with a relatively tight range of CA$72.84 to CA$77.54. However, does this price actually reflect the true value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Toronto-Dominion Bank’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Toronto-Dominion Bank

What's the opportunity in Toronto-Dominion Bank?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17% below my intrinsic value, which means if you buy Toronto-Dominion Bank today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth CA$88.16, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Toronto-Dominion Bank has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Toronto-Dominion Bank look like?

TSX:TD Past and Future Earnings, December 24th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Toronto-Dominion Bank’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? TD’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on TD, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Toronto-Dominion Bank. You can find everything you need to know about Toronto-Dominion Bank in the latest infographic research report. If you are no longer interested in Toronto-Dominion Bank, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.