01:30 PM EDT, 05/17/2024 (MT Newswires) -- In its preview of TD's second quarter earnings, BofA Securities notes that with an outlook for rate cuts to begin in Canada in June, it forecasts Canadian residential mortgage growth of +3%/+11% Q2 2024 FY24e as the bank looks to regain market share and execute on management's strategy outlined at last year's investor day.

Following the publication of TD's US bank call report on May 1 and a Wall Street Journal (WSJ) report detailing US regulators' investigation of TD, investors will look for a concrete timeline for management to resolve the ongoing BSA/AML issue. "While we appreciate that management is limited by ongoing discussion with regulators, we believe clarity on the magnitude and timing of the regulatory impact would go a long way to reversing TD's year-to-date underperformance vs peers."

Absent clarity on ongoing investigations, street will likely look for comps from similar investigations in the U.S. BofA said.

Bottom line: "While we see the potential for a near term stock bounce, we need a lot more clarity on the growth outlook in the US and on potential leadership changes to get more constructive on the stock."

TD is rated Neutral, with an $86 target.

Price: 77.99, Change: +0.52, Percent Change: +0.66