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Analysts rush to hike TD Bank price targets after earnings

Toronto-Dominion Bank was treated to several analyst price target hikes today after beating Street expectations in its latest quarter.

TD's third-quarter core earnings, which exclude one-time items, came in at $1.72 a share, well above the consensus forecast of $1.62. The quarterly dividend was also hiked by 3 per cent to 68 cents a share.

"We view these numbers as the highest quality of the (banking) group this quarter, led by strong lending net interest income and fee-based income in both Canada and the United States," commented CIBC World Markets Inc. analyst Robert Sedran in raising his price target by $1 to $87. He rates TD as a "sector outperformer."

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Canaccord Genuity agreed that TD is "pulling away from the pack" and is even more bullish on potential gains to come, raising his target by $2 to $91. "Our positive outlook on the stock reflects, among other things, the bank's capacity to take market share and keep costs under control as consumer loan growth slows, a lower reliance on trading revenue, and capacity to raise dividends," he said.

Over at Desjardins Securities Inc. analyst Michael Goldberg reiterated his "top pick" rating on the bank. "TD's strategy of building strong franchises that generate steady earnings growth continues to pay off," said Mr. Goldberg. He raised his price target by $1 to $93.


Alter NRG , owner of a plasma gasification technology, has agreed to sell its Fox Creek Coal property for $5-million. Raymond James Ltd. analyst Justin Bouchard was disappointed in the sale price, noting his net asset value estimate for the property was $14-million.

Meanwhile, he has become less optimistic about the company's plasma and geoexchange business units. "This tempered outlook is a function of a lack of sales despite the formidable pipeline of opportunities and an increasingly challenging financial position, which we believe could impact the company's ability to execute on its main business prospects," he said.

The company has $7-million in cash, including the proceeds from the Fox Creek sale, and is expected to burn through about $1-million to $2-million in cash per quarter. It also has a $20.2-million committed equity facility that it can draw on.

Downside: Mr. Bouchard slashed his six- to 12-month price target to $1 from $3.25, but maintained his "outperform" rating.

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Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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