Toronto-Dominion Bank (TSX:TD) Could Be 5% Undervalued On Its Latest Funding Moves
Toronto-Dominion Bank (TSX:TD) has been active in the bond market in August 2026, announcing and completing several fixed income offerings alongside plans to redeem existing subordinated notes. These moves give investors fresh information on its funding profile.
See our latest analysis for Toronto-Dominion Bank.
These funding moves come as Toronto-Dominion Bank’s share price has eased in the past week, with a 7 day share price return of a 6.43% decline and a 30 day share price return of a 4.49% decline, while still showing positive momentum over the year to date and in multi year total shareholder return figures.
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Toronto-Dominion Bank has pulled back in the short term while still showing strong multi year total returns and fresh funding activity in its bond markets. Does that mix still leave the risk reward tilted toward buyers at today’s price?
Most Popular Narrative: 5.3% Undervalued
The most followed narrative currently places Toronto-Dominion Bank’s fair value at CA$170.38 compared with a last close of CA$161.42, which frames a modest valuation gap for investors to consider.
Strong capital position, with a CET1 ratio at 14.8%, and completion of major share buybacks, enhances TD's ability to increase dividends or repurchase additional shares, which could underpin shareholder returns and support the share price.
Growing capital markets and advisory franchise (bolstered by the Cowen acquisition) and diversified earnings mix (including resilient insurance and wholesale banking) strategically position TD to capture growth opportunities and achieve stronger profit margins as global financial conditions stabilize.
Want to see what is baked into that CA$170.38 fair value for Toronto-Dominion Bank? The narrative leans heavily on moderate revenue growth, steady margins and a richer future earnings multiple. Curious which specific long term earnings and valuation assumptions have to line up for that to hold?
Result: Fair Value of CA$170.38 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Toronto-Dominion Bank still faces fintech competition and higher regulatory and compliance costs, which could pressure margins and challenge the fair value narrative.
Find out about the key risks to this Toronto-Dominion Bank narrative.
Another View on Toronto-Dominion Bank’s Valuation
The earlier fair value work points to Toronto-Dominion Bank trading at a discount to estimated cash flows. Yet on plain P/E, the stock looks less generous. TD trades on 18.6x earnings versus an estimated fair ratio of 18.3x and a North American banks average of 11.9x, which suggests less margin for error if growth underdelivers.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If the mixed signals around Toronto-Dominion Bank leave you unsure, take a closer look at the numbers yourself and decide quickly how you feel. To see what the current optimism is built on, review the 3 key rewards
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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