TD closes out September having given back the gains flagged in last week's note, with the stock off 2.2% on the week to CAD 168.83 and the borrow market flashing an unusual spike that sits awkwardly against an otherwise thin short position.
The most striking data point this week is not the size of the short book but the cost of accessing it. Borrowing TD shares has become significantly more expensive in a matter of days. The cost to borrow hit 1.98% on Tuesday, up from 0.60% a week ago, a tripling in price that has no obvious single-day catalyst. The history shows the rate has been volatile all month, swinging between 0.45% and 1.80% across September, so some of this reflects end-of-quarter settlement mechanics rather than a structural shift in bearish conviction. Availability remains extremely loose at around 6,593% of short interest, meaning there are far more shares available to lend than there are shorts borrowing them. That level of availability has compressed from above 9,000% in early September, a meaningful tightening in proportional terms, though still nowhere near a constraint on new short sellers. Short interest itself has edged up 11% over the past month to 1.8% of free float, a level that remains low in absolute terms and carries no meaningful squeeze risk.
The Street picture has not shifted materially since last week's note. The consensus mean price target of CAD 178.36 implies a little under 6% upside from current levels, a gap that has widened slightly as the stock has pulled back. EPS momentum remains a genuine bright spot: TD ranks in the 87th percentile on 30-day EPS momentum and the 81st percentile over 90 days, with the earnings surprise factor at the 74th percentile. The dividend score, at the 89th percentile, underlines TD's standing as a core income holding for Canadian institutional investors. The P/E has drifted down slightly on the week to 15.5x, and price-to-book is 2.3x, both reasonable multiples for a large Canadian bank. No recent analyst changes are on the wire.
The Canadian banking sector's own balance sheet data adds context worth noting. OSFI filings show TD's total Canadian bank assets reached a record high for any July in data going back to 1996, at CAD 2.11 trillion, with personal loans also at a record July level of CAD 329 billion. These are facts about the Canadian banking system's aggregate picture as compiled from regulatory filings, not direct revenue forecasts, but they confirm that the domestic lending environment TD operates in is not contracting. On the US side, FDIC call report data shows TD's US insured bank charter has seen total assets fall for seven consecutive quarters through April 2026, reaching USD 375 billion, with net loans and leases down for the same seven-quarter stretch to USD 170 billion. That streak reflects the ongoing restructuring and de-risking of TD's US operations following the 2024 AML settlement.
The peer group moved broadly in the same direction this week. RY fell 1.4%, BMO dropped 1.9%, and CM slipped 1.9%. NA was the week's weakest Canadian bank, down 3.1%. TD's 2.2% decline puts it roughly in line with the sector rather than standing out as a specific underperformer, a small change from the pattern described in last week's note where peers were outpacing TD on a year-to-date basis. Institutional holders are broadly stable: BlackRock crossed 5% and filed a 13G in April 2026, and Vanguard filed its own 13G at 5.0% in July 2026. Neither holder is flagged as activist. Bank of Montreal dropped just below 5% and filed an amendment in August 2025; as the disclosure note makes clear, it may have moved further without any obligation to file again.
The next earnings date is December 3. With 64 days to go, the print covers a quarter where the cost to borrow has been unusually volatile and short positions have quietly climbed, making the Canadian net interest margin and any US remediation update the two numbers most worth watching when the quarter closes.
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