Royal Bank Of Canada (TSE:RY)
NYSE:RY
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Royal Bank Of Canada
(NYSE:RY)
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Rating:72Outperform
Price Target:
C$289.00
â–²(18.33% Upside)
Action:Upgraded
Date:05/29/26
The score is driven primarily by solid financial performance (profitability, TTM growth, and strong FCF conversion), supported by a strong earnings-call backdrop (record results, strong capital, buybacks) and favorable technical uptrend. The main constraints are balance-sheet leverage/credit-risk signals cited in the financials and call (provisions and impaired loans), plus valuation that is reasonable but not especially cheap.
Positive Factors
Wealth management scale and net new asset growth
RBC's Wealth franchise shows durable, fee‑based revenue growth driven by rising AUA/AUM and adviser recruitment. Scale in wealth creates sticky, recurring fees and cross‑sell opportunities, smoothing earnings volatility and supporting long‑term earnings diversification beyond interest income.
Negative Factors
Elevated balance‑sheet leverage historically
Historically high leverage increases sensitivity to funding stress and constrains capital flexibility for acquisitions or shock absorption. Although recent TTM metrics improved, the legacy elevated leverage profile remains a multi‑quarter risk that can amplify losses and limit discretionary capital deployment.
Read all positive and negative factors
Positive Factors
Negative Factors
Wealth management scale and net new asset growth
RBC's Wealth franchise shows durable, fee‑based revenue growth driven by rising AUA/AUM and adviser recruitment. Scale in wealth creates sticky, recurring fees and cross‑sell opportunities, smoothing earnings volatility and supporting long‑term earnings diversification beyond interest income.
Read all positive factors
Royal Bank Of Canada (RY) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$378.40B
Dividend Yield2.58%
Average Volume (3M)3.70M
Price to Earnings (P/E)17.0
Beta (1Y)0.66
Revenue Growth1.99%
EPS Growth22.50%
CountryCA
Employees94,624
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)15.42
Shares Outstanding1,396,609,900
10 Day Avg. Volume3,088,365
30 Day Avg. Volume3,697,208
Financial Highlights & Ratios
PEG Ratio0.56
Price to Book (P/B)2.08
Price to Sales (P/S)2.11
P/FCF Ratio5.47
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$278.31Price Target Upside13.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)16.07
Revenue Forecast (FY)C$71.68B
Royal Bank Of Canada Business Overview & Revenue Model
Company Description
Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lendin...
How the Company Makes Money
RBC primarily makes money by earning (1) net interest income and (2) non-interest (fee-based) income across its business segments.
Net interest income (spread-based revenue): In its retail and commercial banking activities, RBC takes deposits (e....
Royal Bank Of Canada Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 27, 2026
Earnings Call Sentiment Positive
The call presented a strong set of financial results with multiple record outcomes—earnings, revenue, Wealth and Capital Markets performance—robust profitability (ROE ~17.6%), solid capital (CET1 13.7%) and active share buybacks. Growth in fee-based businesses and AUA/AUM expansion underpin durable revenue streams. Offsetting these positives were higher provisions in pockets of the wholesale and retail portfolios, a rise in gross impaired loans, a one-time-related drop in insurance income, modest margin headwinds from PPA roll-off, and continued regional housing and trade-related loan growth pressures. Management reiterated disciplined capital allocation, mid-single-digit NII guidance (ex-trading), mid-single-digit expense growth, and confidence in AI and other investments to drive future productivity. Overall, the positives (record results, strong capital and profitability, wealth and markets momentum, and buybacks) materially outweigh the contained credit and margin headwinds.Positive Updates
Record earnings and revenue
Reported record earnings of $5.8 billion and adjusted earnings of $5.9 billion; pre-provision pretax earnings nearly $8.5 billion (up 14% year-over-year) and record revenue of nearly $18 billion. Diluted EPS $4.03 and adjusted diluted EPS $4.08 (up 13% year-over-year).
Negative Updates
Increased credit provisions in parts of the portfolio
PCL on impaired loans was 40 basis points, up 2 basis points (approximately $84 million) quarter-over-quarter. Performing-loan provisions were $28 million (1 basis point) this quarter. Capital Markets provisions on impaired loans increased by $130 million QoQ driven by specific large borrowers.
Read all updates
Q1-2026 Updates
Positive
Negative
Record earnings and revenue
Reported record earnings of $5.8 billion and adjusted earnings of $5.9 billion; pre-provision pretax earnings nearly $8.5 billion (up 14% year-over-year) and record revenue of nearly $18 billion. Diluted EPS $4.03 and adjusted diluted EPS $4.08 (up 13% year-over-year).
Read all positive updates
Company Guidance
Management's 2026 guidance highlighted mid‑single‑digit growth in all‑bank net interest income (ex‑trading), with the bulk of the remaining $80m PPA accretion rolling off next quarter (≈ a 4‑bp headwind to Canadian banking NIM); all‑bank NIM was down 7 bps QoQ (ex‑trading NIM +1 bp QoQ) and Canadian banking NIM would have been ~+2 bps excluding the PPA effect. They reiterated low‑ to mid‑single‑digit mortgage growth and commercial loan growth nearer the lower end of mid‑ to high‑single‑digits, expect all‑bank expense growth in the mid‑single‑digit range while still delivering positive all‑bank operating leverage (1–2% for Canadian Banking), see the adjusted non‑TEB effective tax rate moving toward the higher end of the 21–23% band over the next 12 months, expect corporate support losses to trend to the lower end of $100–150m/quarter, foresee a modest ~10‑bp negative CET1 impact next quarter from retail capital parameter changes, and reiterated that full‑year 2026 provisions on impaired loans should remain within prior guidance; they also noted roughly $1bn annual technology/safety spend and continued capital returns (Q1 buybacks ≈4.2m shares / ~$1bn).Royal Bank Of Canada Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 120.33B | 137.36B | 54.11B | 49.00B | 48.50B | 50.45B |
| Gross Profit | 65.64B | 62.17B | 54.11B | 49.00B | 48.50B | 50.45B |
| EBITDA | 14.73B | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Net Income | 22.14B | 20.36B | 16.23B | 14.61B | 15.79B | 16.04B |
Balance Sheet | ||||||
| Total Assets | 2.40T | 2.33T | 2.17T | 2.01T | 1.92T | 1.71T |
| Cash, Cash Equivalents and Short-Term Investments | 59.35B | 165.28B | 167.13B | 212.00B | 240.60B | 231.03B |
| Total Debt | 390.27B | 834.96B | 779.52B | 774.59B | 699.12B | 567.25B |
| Total Liabilities | 2.26T | 2.19T | 2.04T | 1.89T | 1.81T | 1.61T |
| Stockholders Equity | 140.72B | 139.09B | 127.09B | 117.66B | 108.06B | 98.67B |
Cash Flow | ||||||
| Free Cash Flow | 71.25B | 52.98B | 20.86B | 23.35B | 19.44B | 58.86B |
| Operating Cash Flow | 73.39B | 55.22B | 23.14B | 26.08B | 21.94B | 61.04B |
| Investing Cash Flow | -46.90B | -68.57B | -20.89B | -28.27B | -57.05B | -57.35B |
| Financing Cash Flow | -13.77B | -6.71B | -8.15B | -9.83B | -2.19B | -5.93B |
Royal Bank Of Canada Technical Analysis
Positive
244.23
Price Trends
244.31
Positive
235.97
Positive
221.72
Positive
Market Momentum
6.54
Negative
75.20
Negative
92.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RY, the sentiment is Positive. The current price of 244.23 is below the 20-day moving average (MA) of 257.67, below the 50-day MA of 244.31, and above the 200-day MA of 221.72, indicating a bullish trend. The MACD of 6.54 indicates Negative momentum. The RSI at 75.20 is Negative, neither overbought nor oversold. The STOCH value of 92.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:RY.
Royal Bank Of Canada Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | C$162.16B | 16.55 | 11.25% | 3.61% | -4.35% | 21.22% | |
72 Outperform | C$378.40B | 17.03 | 15.95% | 2.58% | 1.99% | 22.50% | |
71 Outperform | C$78.78B | 17.13 | 13.77% | 2.64% | 6.36% | 7.80% | |
70 Outperform | C$140.46B | 14.19 | 15.24% | 3.07% | -3.32% | 27.25% | |
68 Neutral | C$139.41B | 14.47 | 11.06% | 4.32% | -5.52% | 47.19% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | C$266.99B | 17.57 | 11.85% | 3.34% | -11.69% | -11.99% |
* Financial Sector Average
TSE:RY
Royal Bank Of Canada
270.60
101.16
59.71%
TSE:BMO
Bank Of Montreal
229.23
86.28
60.36%
TSE:BNS
Bank Of Nova Scotia
112.36
42.06
59.82%
TSE:CM
Canadian Bank of Commerce
151.87
60.92
66.98%
TSE:TD
Toronto Dominion Bank
157.74
64.80
69.72%
TSE:NA
National Bank of Canada
204.35
74.56
57.45%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.