Q: TD still has a target price much higher than current levels, and we did have an earnings beat today, but debt ratio even worse. Where do you think this will be a couple years from now?
5i Research Answer:
Predictions on small, beaten-up (down 66% in a year) small caps are always tricky. Debt is still way too high for our comfort zone as well. TD we think is dreaming with a $4.50 target. BUT...in a risk-on market, we might set a $1.25 target or even $1.50 over a few years. Note this is not an endorsement of the stock. But if investors get confident, the leverage becomes less of a concern, and small stocks can move a lot under such conditions.