Inside the Market’s roundup of some of today’s key analyst actions

While Toronto-Dominion Bank’s (TD-T) “transition year [is] nearing an end” following its actions to adjust to anti-money laundering controls and a cap on U.S. retail assets imposed by regulators, National Bank Financial analyst Gabriel Dechaine cautions “growth beyond it is still a question mark” as expenses continue to weigh on results.

“TD’s adjusted expenses were 2 per cent above our forecast, which overwhelmed what was a strong period of revenue growth (i.e., 1 per cent above forecast),“ he said. ”We believe expense inflation could be a persistent headwind to TD’s growth. Aside from AML remediation costs booked in the U.S. P&C segment, similar governance/compliance/regulatory costs are being incurred across the rest of the bank. Moreover, investments to position certain business for future growth will weigh on near term performance. For example, despite 15-per-cent revenue growth, the Wholesale segment generated negative operating leverage, with management commentary suggesting a multi-year investment period prior to achieving targeted returns and efficiency levels.”

A breakdown of the big banks’ third-quarter earnings so far

TD shares closed down 4.5 per cent after it reported a quarterly profit of $3.34-billion, or $1.89 per share, rebounding from a loss during the same period a year ago when U.S. regulators hit the bank with a US$3-billion fine over lapses in preventing money laundering. After adjusting to exclude that charge, TD earned $2.20 per share, ahead of Mr. Dechaine’s $2.07 estimate and the Street’s expectation of $2.05.

“During the quarter, TD completed the sale of $6-billion of low-yielding securities, bringing the cumulative total to $25-billion, which is expected to generate an NII uplift of $500-milion in fiscal 2025 (at an upfront cost of $1.3-billion pre-tax),“ he said. ”Separately, TD has reduced non-core loans on the U.S. balance sheet by $17-billion so far and has targeted another $18-billion for exit/run-off. Eventually, investors will shift their attention to the process of ‘creating room’ on the U.S. balance sheet towards organic growth within the constraints of the asset cap.”

The analyst also emphasized TD is maintaining its “conservative” credit guidance as banks across the sector prepare for further turbulence brought on by the uncertain trade relationship with the United States. TD now has $600-million reserved to absorb potential losses on loans from trade upheaval.

“TD maintained its 45-55 basis points PCL [provisions for credit losses] ratio guidance range, despite a much lower figure of 41 bps (38 bps impaired) reported this quarter,” he said. “TD stated that it expects impaired PCLs to rise from this quarter’s level. In our view, this commentary reflects an expectation of the lagged impact (e.g., stagnant employment, lower business investment) caused by tariff uncertainty.”

After increasing his estimates to reflect “slightly” lower PCLs, Mr. Dechaine increased his target for TD shares by $1 to $100, maintaining a “sector perform” recommendation. The average target on the Street is $103.28, according to LSEG data.

Elsewhere, other analysts making target revisions include:

* Desjardins Securities’ Doug Young to $110 from $107 with a “buy” rating.

“Cash EPS was above our estimate and consensus, while adjusted pre-tax, pre-provision (PTPP) earnings were in line with our estimate. Overall, not much new frankly. TD is hosting an investor day at the end of September, at which time we should get a lot more detail on strategy and targets. We increased our estimates and target price,” said Mr. Young.

* Scotia’s Mike Rizvanovic to $104 from $95 with a “sector perform” rating.

* Barclays’ Brian Morton to $97 from $95 with an “underweight” rating.

* Canaccord Genuity’s Matthew Lee to $113 from $109 with a “buy” rating.

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TD Cowen analyst Mario Mendonca saw the third-quarter financial report from Canadian Imperial Bank of Commerce (CM-T) “favourably”, pointing to “a) stability in PCLs; b) strong growth in Canadian P&B PTPP [personal and business banking pre-tax, pre-provision]; c) strong capital markets; and d) ongoing NIM expansion.”

“In our view, results support a P/E in line with the group,” he added in a client note. “CIBC repurchased 5.5mm shares and announced a 20 million share NCIB [normal-course issuer bid]. We raised our estimates approximately 4 per cent following results.”

CIBC shares closed up over 2 per cent on Thursday after it reported adjusted earnings per share for the quarter of $2.16, up 12 per cent year-over-year and topping both Mr. Mendonca’s $2.04 projection and the consensus forecast of $2.01, with trading revenue, underwriting and net interest income all ahead of expectations.

“PCLs were in-line with our forecast, reflecting performing PCLs coming back down to 5 basis points (est. 5 bps) as CM had built tariff-related uncertainty last quarter,” the analyst said. “Impaired PCL ratio was flat, with a large account in capital markets and offsets in commercial/ wealth segments. We believe investors might focus on mortgage delinquencies rising 3 bps quarter-over-quarter to 36bps, driven mainly by Toronto and Vancouver mortgages. LTVs remain low. We do not expect a material increase in mortgage losses. Unsecured consumer delinquencies were down q/q (personal loans, credit cards), which is a positive development in this more vulnerable loan category. GIL formations were up slightly q/q. CM did not change guidance on mid-30bps of impaired PCLs

“CM continues to deliver solid absolute and relative NII growth and NIM performance. The all-bank NIM, up 6 bps quarter-over-quarter, benefited from better NIM performance in Canada (up 8 bps q/q) and the U.S. (up 6 bps q/q). Canadian P&B NIMs (up 11bps q/q) drove 18-per-cent year-over-year PTPP growth, in-line with RY’s. Higher rates, improving loan mix, and a focus on margin over volumes continue to support NIM. We still see overall bank NIM increasing modestly and gradually, though not as much as recent years.”

After raising his forecast through fiscal 2027 to reflect “better NIM, loan growth and stronger capital markets, offset by higher expenses and slightly higher mortgage PCLs,” Mr. Mendonca hiked his target for CIBC shares to $117 from $110. The average target is $108.30.

“CIBC delivered another quarter of solid underlying results and continues to trade at a discount P/E,“ he concluded. ”The market remains sensitive to CIBC’s domestic focus in the context of tariffs. We believe CIBC’s consistently good PTPP growth, strong NIM profile, capital strength (announced NCIB), and steady credit metrics support a higher P/E multiple relative to most of its peers.”

Other analysts making target revisions include:

* National Bank’s Gabriel Dechaine to $110 from $99 with a “sector perform” rating.

“CM’s all-bank NIM expanding 6 basis points quarter-over-quarter, underpinned by [a gain of] 8 basis points in Canadian P&C banking, was a positive surprise this quarter. The bank benefited from several tailwinds this quarter, including favourable deposit mix/pricing trends, stable/rational competitive factors and the ongoing benefit of higher yields on securities reinvestment. Although we view this quarter’s NIM expansion as exceptionally strong, management guided to gradual margin expansion, reflecting continuation of trends that were apparent this quarter. We note the bulk of our EPS revisions were tied to this favourable margin dynamic,” said Mr. Dechaine.

* RBC’s Darko Mihelic to $113 from $112 with an “outperform” rating.

“CM’s Q3/25 results exceeded our expectations mainly reflecting strength in U.S. and Canadian Commercial Banking and Wealth by segment, and in revenue on a consolidated basis. Credit quality appears stable as impaired PCLs were below our estimate. Although formations were up QoQ and remain elevated, trends appear relatively stable. We also view the newly announced 2-per-cent NCIB favourably and think they may end up buying back all of the stock allowed under it as organic growth opportunities are likely limited shorter term. Our core EPS estimate increases were modest, our price target rises,” said Mr. Mihelic.

* Desjardins Securities’ Doug Young to $113 from $106 with a “buy” rating.

“Cash EPS and adjusted pre-tax, pre-provision (PTPP) earnings were above our expectations and consensus, and it was a relatively clean quarter — exactly what we want to see. The messaging around NIMs, expenses, credit and buybacks was consistent. We adjusted our estimates, increased our target,” said Mr. Young.

* Scotia’s Mike Rizvanovic to $116 from $101 with a “sector outperform” rating.

* Barclays’ Brian Morton to $106 from $96 with an “underweight” rating.

* Canaccord Genuity’s Matthew Lee to $111 from $102 with a “hold” rating.

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While warning 2025 will continue to be “weak” for EQB Inc. (EQB-T), RBC Dominion Securities analyst Darko Mihelic expects return on equity to improve and sees an “attractive” valuation for the Toronto-based digital financial services company.

“EQB’s results were weaker than we expected across all pre-tax line items (except for non interest revenue), particularly for NII and noninterest expense,” he said. “Total PCLs were higher than expected, but this was mainly driven by performing PCLs and we view this as conservative. EQB’s adjusted efficiency ratio increased 410 bps quater-over-quarter but it suggested that it plans to return its efficiency ratio towards historical levels. Loan growth remained solid.”

Shares of EQB plummeted 11.2 per cent on Thursday after it reported adjusted earnings per share of $2.07, down 11 per cent year-over-year and well below both Mr. Mihelic’s $2.61 estimate and the consensus forecast of $2.53 due to lower revenues, higher expenses and expanded provisions for credit losses.

“Earnings were weaker than expected across all pre-tax line items except for non-interest income, particularly for net interest income (NII) and non-interest expense,” he noted. “NII was $254.1-million, below our $263.3-million forecast while non-interest expense of $165.5-million was above our estimate.

“We update our model mostly reflecting lower NII driven by lower net interest margins (NIMs) and lower loan growth and we decrease our non-interest revenue estimates (2026 and 2027).”

Mr. Mihelic’s core EPS projections for 2025, 2026 and 2027 fell to $9.59, $11.24 and $12.82, respectively from $10.53, $11.66 and $13.53.

“This was a difficult quarter for EQB and we do not believe a turnaround can happen very quickly,” he said. “We believe next quarter’s result is also likely to be weak and generally below typical ROE aspirations for this bank.

“We believe results could improve rapidly in 2026 for the following reasons: 1. Unless there is an unexpected and drastically bad tariff outcome between Canada and the U.S., we expect the Canadian economy to gradually improve and a more stable housing market. This is likely to lead to lower PCLs (not just for EQB but for the system entirely) in our view. 2. We believe EQB will be a little more frugal on expenses. 3. We believe at current valuations the bank may engage in more buybacks. Buyback behaviour in the past has been relatively light but it would make sense to use its buyback capacity if the stock continues to trade so close to book value.”

The results prompted him to cut his price target for EQB shares to $112 from $124, keeping an “outperform” rating. The average is $105.60.

“We maintain our OP rating as valuation is significantly below what we would view as appropriate for a growth-oriented bank with a solid/ improving ROE; even after reducing our target multiple to 10.0 times our 2026E core earnings (was 10.6 times ) much potential upside exists,“ he said. ”We believe 2026 results could improve rapidly as we expect PCLs to gradually improve with the Canadian economy (as we do for all banks in our coverage) outside of a “bad-case” scenario for tariffs; we also expect expenses to come down and at current valuations we believe EQB may engage in more buybacks.”

“[Thursday’s] stock price action brings its valuation significantly below what we would view as appropriate for a growth-oriented bank stock with a solid ROE. We conservatively model the bank to bring its ROE back up above 13 per cent for 2027 in the absence of significant guidance from the company. But even after bringing our target P/E multiple down to a very pedestrian 10x forward earnings much upside exists to our target price.”

Elsewhere, Jefferies’ John Aiken downgraded EQB to “hold” from “buy” with a $107 target, down from $119.

Other target changes include:

* Desjardins Securities’ Doug Young to $103 from $110 with a “buy” rating.

“Adjusted pre-tax, pre-provision (PTPP) earnings were 6 per cent below our estimate and 9 per cent below consensus. To add fuel to the fire, the results were messy. We see EQB as a FY26 story and we will have to wait until 4Q FY25 results to get management’s guidance for FY26. We lowered our estimates and target price,” said Mr. Young.

* CIBC’s Paul Holden to $116 from $126 with a “hold” recommendation.

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Touting the potential of its Antino gold project in Africa, National Bank Financial analyst Mohamed Sidibé initiated coverage of Founders Metals Inc. (FDR-X) with an “outperform” rating, seeing it as an “attractive” potential target for larger peers.

On Tuesday, B2Gold Corp. (BTO-T) revealed it has expanded its position in the Vancouver-based exploration company by purchasing an additional 1.17 million shares through the open market, raising its stake to approximately 6 per cent.

“Founders is a pre-resource Canadian gold exploration company focused on advancing the Antino gold project in Suriname, located in the highly prospective Guiana Shield Gold Belt host to more than 110 million ounces of resources delineated including the Rosebel mine (Zijin Mining), Merian mine (Newmont) and the Oko West project (G Mining),” said Mr. Sidibé. “Upper Antino already demonstrates multiple high-grade zones over significant strike lengths, open in all directions, and we estimate a resource potential of 3.7-6.9 million oz at very high grades amenable to open-pit mining. This could support an attractive production profile of 330 koz at AISC below $900/oz placing it in the lowest-cost quartile among Americas gold projects based on our benchmarking exercise in our conceptual DCF. While it remains early to ascertain this potential, we view the exploration results to date and the strength of the team, as well as strategic investment from B2Gold as supportive of our thesis and positive outlook for the company.”

The analyst said Founders’ ongoing and fully funded exploration program is “rapidly advancing multiple high-grade discoveries, where consistently strong gold intercepts point to both scale and grade.”

“Our conceptual DCF on Upper Antino highlights an attractive and economical 330 koz producer at AISC below $900/oz in the lowest cost quartile and at a conservative initial capex of $1.3 billion benchmarked to recent builds and studies on projects within the Guiana shield,” he added.

“We believe that discoveries of this scale remain rare within the space, and we expect it to attract the interest of larger companies within the space as highlighted by the takeout of Reunion Gold by G Mining for C$875-million (or an EV/oz of US$102/oz on a total resource basis) and B2Gold’s direct equity investment in the company. The jurisdiction, which we consider tier-2, is supportive of project development given the presence of Merian and Rosebel, two large-scale gold mines.”

Mr. Sidibé set a target of $6 per share, representing an estimated total return of 65.7 per cent. The average on the Street is $9.38.

“With a clear runway of positive drill results ahead, Founders Metals is well positioned to deliver asymmetric returns in a strengthening gold market,” he aded.

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