RBC CM: Pair Trade Idea � Long TD Bank, Short BMO

RBC Capital Markets, 18September 2008Pair Trade Rationale:We prefer TD Bank's stock to Bank of Montreal's. TD is currently trading at the same P/B multiple as BMO, and at a 0.5x premium on a forward P/E basis. However, we believe TD's premium should be higher due to: (1) a more valuable business mix; (2) less credit concerns in the near term; (3) a stronger and faster growing domestic franchise,