Royal Bank Of Canada (RY) AI Stock Analysis

• Market Cap: C$254.40B
• Dividend Yield: 4.49%
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.87
• Revenue Growth: 6.03%
• EPS Growth: 15.60%
• Country: CA
• Employees: 94,624
• Sector: Financial
• Sector Strength: 80
• Industry: Banks - Diversified
• EPS (TTM): 3.12
• Shares Outstanding: 1,410,276,700
• 10 Day Avg. Volume: 3,531,205
• 30 Day Avg. Volume: 3,278,486
• PEG Ratio: 6.14
• Price to Book (P/B): 1.92
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.08
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$187.91
• Price Target Upside: 4.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 78 Outperform
• Price Target: C$206.00 ▲(14.20%Upside)

Royal Bank of Canada's strong financial performance and positive earnings call sentiment are the primary drivers of the stock's score. The bank's solid profitability, robust revenue growth, and strategic initiatives position it well, despite challenges from increased credit loss provisions and economic uncertainties. The stock's reasonable valuation and attractive dividend yield further enhance its investment appeal.

Positive Factors

Dividend and Share Buyback

Raised its quarterly dividend by approximately 4% to $1.54/share and announced a 35mm/~2% NCIB.

Earnings Guidance

Management maintained its guidance for high single to low double-digit NII, which should help the bank surpass its 7% earnings guidance for the year.

Wealth Management

Wealth Management income was 10% higher year over year and bettered forecasts with higher client assets.

Negative Factors

Credit Loss Provisions

Commercial Banking and Capital Markets missed expectations due to higher Provisions for Credit Losses (PCLs).

Earnings Miss

Operating EPS of $3.12 missed consensus forecasts of $3.16 by 1% as the bank chose to not exclude non-recurring EPS drag from results.

Investment Banking Revenue

Geopolitical uncertainty has mired investment banking activity this year, contributing to a 7% year-over-year revenue decline in Q2 in C&IB.

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 lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital, mobile, and social platforms; independent brokers; and travel partners. Its Investor & Treasury Services segment provides asset servicing, custody, payments, and treasury services to financial and other investors; and fund and investment administration, shareholder, private capital, performance measurement and compliance monitoring, distribution, transaction banking, cash and liquidity management, foreign exchange, and global securities finance services. The company's Capital Markets segment offers corporate and investment banking, as well as equity and debt origination, distribution, advisory services, sale, and trading services for corporations, institutional investors, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.

How the Company Makes Money

Royal Bank of Canada generates revenue through various streams, primarily segmented into personal and commercial banking, wealth management, insurance, investor and treasury services, and capital markets. Personal and commercial banking remains a significant source of income, comprising fees from traditional banking services, loans, mortgages, and credit cards. The wealth management division contributes through advisory services, asset management, and brokerage fees. The insurance segment provides income through premiums from life, health, and property insurance products. Investor and treasury services generate revenue through custodial, fund administration, and transaction processing services. Capital markets division earns by facilitating trading, investment banking, and advisory services. The bank's earnings are also bolstered by its strategic partnerships and investments in technology to enhance digital banking capabilities and customer experience.

Royal Bank Of Canada Financial Statement Overview

Summary

Royal Bank of Canada exhibits a strong financial position with consistent revenue growth, high profitability margins, and robust cash flow generation. Despite moderate leverage, the bank maintains industry norms, and the return on equity is commendable. The bank's comprehensive financial health positions it well for future growth and stability, though careful management of leverage is essential to mitigate potential risks.

Income Statement

Royal Bank of Canada demonstrates strong financial performance with consistent revenue growth, evident from a TTM (Trailing-Twelve-Months) revenue increase to $60.45B from $57.49B in the previous year. The bank maintains robust profitability metrics, including a high gross profit margin of 100% and a solid net profit margin of approximately 29.4%. Although there was a slight decline in EBIT margin to 30.8% in TTM, the EBITDA margin remains healthy at 34.6%. These metrics indicate a highly efficient and profitable operation with well-managed expenses.

Balance Sheet

The balance sheet of Royal Bank of Canada is robust, showcasing a stable financial position with an equity ratio of 6.1%, reflecting a healthy level of equity relative to total assets. The debt-to-equity ratio stands at 3.7, indicating moderate leverage which is typical in the banking industry. The return on equity (ROE) is strong at 13.3%, suggesting effective use of equity capital to generate profits. The bank's balance sheet is solidly positioned, although the leverage could be a risk factor if not well-managed.

Cash Flow

The cash flow situation for Royal Bank of Canada is excellent, with a significant operating cash flow of $59.89B in TTM, highlighting strong cash-generating capabilities. The free cash flow growth rate is impressive at 175% year-over-year, demonstrating substantial improvement. The operating cash flow to net income ratio is favorable at 3.37, and the free cash flow to net income ratio is also strong at 3.23, indicating effective conversion of income into cash. This strong cash flow performance supports the bank's ability to invest in growth and manage debt obligations comfortably.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	97.55B	57.49B	53.66B	48.77B	49.54B	47.10B
Gross Profit	59.65B	57.49B	56.26B	48.77B	49.54B	47.10B
EBITDA	27.32B	27.28B	21.45B	22.63B	23.06B	16.92B
Net Income	18.22B	16.23B	14.86B	15.79B	16.04B	11.43B
Balance Sheet
Total Assets	2.24T	2.17T	2.00T	1.92T	1.71T	1.62T
Cash, Cash Equivalents and Short-Term Investments	410.65B	167.13B	212.00B	240.60B	231.03B	297.64B
Total Debt	781.27B	474.20B	439.35B	425.18B	305.05B	9.87B
Total Liabilities	2.11T	2.04T	1.89T	1.81T	1.61T	1.54T
Stockholders Equity	132.45B	127.09B	117.66B	108.06B	98.67B	86.66B
Cash Flow
Free Cash Flow	62.34B	20.86B	23.35B	19.44B	58.86B	136.19B
Operating Cash Flow	64.90B	23.14B	26.08B	21.94B	61.04B	138.82B
Investing Cash Flow	-130.57B	-20.89B	-28.27B	-57.05B	-57.35B	-39.56B
Financing Cash Flow	50.33B	-8.15B	-9.83B	-2.19B	-5.93B	-7.75B

Royal Bank Of Canada Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 180.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 180.39 is above the 20-day moving average (MA) of 176.64, above the 50-day MA of 173.66, and above the 200-day MA of 168.62, indicating a bullish trend. The MACD of 1.87 indicates Negative momentum. The RSI at 67.78 is Neutral, neither overbought nor oversold. The STOCH value of 81.24 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CM	83 Outperform	C$91.62B	12.28	13.19%	3.96%	5.38%	21.68%
TD	79 Outperform	$177.39B	10.49	14.27%	4.14%	13.12%	61.99%
RY	78 Outperform	C$254.40B	14.33	14.17%	4.49%	6.03%	15.60%
NA	78 Outperform	$54.92B	13.22	13.42%	3.37%	17.13%	14.73%
Sector *	73 Outperform	€28.72B	11.27	17.20%	3.96%	9.17%	28.21%
BMO	72 Outperform	$111.35B	14.31	9.88%	5.67%	6.98%	32.63%
BNS	71 Outperform	$93.43B	15.14	8.00%	5.86%	3.72%	-17.99%