08:14 AM EST, 01/13/2025 (MT Newswires) -- Toronto-Dominion Bank ( MLWIQXX ) will likely sell its stake in Charles Schwab Corp. ( SCHW ) , CIBC Capital Markets said.

"We believe there is a high probability that TD will sell its 10% stake in Schwab and that the sale could happen before conclusion of the strategic review," analyst Paul Holden said in a note to clients.

Holden said the estimated EPS accretion for a sale and immediate repurchase of TD stock is approximately 5%.

"We believe there is also potential for a rerating of TD stock, as decisive and material value-surfacing action by the incoming CEO should be viewed as a more shareholder-friendly approach versus prior management," the analyst said.

"TD management simply has to address the question of whether the investment in SCHW is strategic or not," Holden said. We believe the answer is 'not'."

"Raymond Chun, incoming CEO, has communicated a willingness to act on certain items before completion of the strategic review. In our opinion, the sale of SCHW stock is one of the items that does not require completion of a full strategic review."

Holden maintained an Outperformer rating and $90 price target on TD shares.