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Royal Bank Of Canada
(TSX:RY)
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Rating:70Outperform
Price Target:
C$312.00
â–²(10.40% Upside)
Action:Upgraded
Date:08/28/26
The score is driven primarily by strong financial performance (rising earnings, improving ROE, and robust cash generation) and a constructive earnings call with reiterated guidance and strong capital returns. These positives are partially offset by weaker near-term technical momentum (below key moving averages with negative MACD) and only moderate valuation support (P/E ~18.4 with a ~2.32% yield), alongside credit/expense headwinds highlighted on the call.
Positive Factors
Diversified earnings growth
RBC’s broad exposure to personal, commercial, wealth and capital-markets services supports resilient earnings. Simultaneous growth across several franchises reduces reliance on any single market and strengthens the bank’s ability to compound through cycles.
Negative Factors
Rising impaired loans and concentrated credit risk
Higher impaired loans indicate emerging stress in selected commercial and real-estate exposures. Concentration in Capital Markets and additional provisions could pressure earnings and capital if refinancing conditions worsen or losses spread to other sectors.
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Positive Factors
Negative Factors
Diversified earnings growth
RBC’s broad exposure to personal, commercial, wealth and capital-markets services supports resilient earnings. Simultaneous growth across several franchises reduces reliance on any single market and strengthens the bank’s ability to compound through cycles.
Read all positive factors
Royal Bank Of Canada (RY) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$399.49B
Dividend Yield2.32%
Average Volume (3M)3.25M
Price to Earnings (P/E)18.4
Beta (1Y)0.62
Revenue Growth4.67%
EPS Growth19.97%
CountryCA
Employees97,795
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)15.90
Shares Outstanding1,386,599,500
10 Day Avg. Volume3,682,587
30 Day Avg. Volume3,251,975
Financial Highlights & Ratios
PEG Ratio0.58
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$305.36Price Target Upside8.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)16.14
Revenue Forecast (FY)C$71.84B
Royal Bank Of Canada Business Overview & Revenue Model
Company Description
Royal Bank of Canada functions as a globally diversified financial services powerhouse. Its Personal & Commercial Banking arm extends a wide array of offerings to individual clients and small to medium-sized businesses. For retail customers, these...
How the Company Makes Money
Royal Bank of Canada generates revenue primarily through a mix of net interest income and non-interest (fee-based and market-related) income across its business segments. (1) Net interest income (spread-based banking): RBC earns interest on loans ...
Royal Bank Of Canada Earnings Call Summary
Earnings Call Date:Aug 27, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Dec 03, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive performance: record company-wide earnings, revenue, EPS and multiple segment records (Personal Banking, Commercial Banking, Capital Markets, Wealth Management). Strong deposit growth, capital generation (80 bps), healthy CET1 (13.5%), and active capital returns (dividends and $1.6B buyback) underpin shareholder value. Management highlighted strategic initiatives (AI monetization target and creation of a global transaction banking business) and continued organic growth momentum, particularly in high-return franchises. Offsetting items include localized credit stress (rise in impaired loans and an incremental $120M provision in Capital Markets), a 20% decline in insurance earnings, trading NII headwinds, modest NIM compression and elevated operating expenses leading to negative operating leverage in Canadian Banking this quarter. Overall, the positive operational and financial momentum and robust capital position materially outweigh the contained headwinds.Positive Updates
Record Earnings, Revenue and EPS Growth
Reported record earnings of $6.0 billion, up 11% year-over-year; revenues grew 9% YoY. Diluted EPS $4.23 and adjusted diluted EPS $4.28, up 11% YoY. Adjusted operating leverage 2.4% and adjusted efficiency ratio 52%. Return on equity ~17.9% and book value per share up 10% YoY. Internal capital generation of 80 basis points in the quarter.
Negative Updates
Increase in Gross Impaired Loans, Concentrated in Capital Markets
Gross impaired loans increased $353 million QoQ (1 basis point), primarily due to a $466 million rise in Capital Markets impaired loans driven by real estate and related sectors. Wealth Management (predominantly City National Bank) impaired loans rose $114 million, largely tied to the utility sector.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Earnings, Revenue and EPS Growth
Reported record earnings of $6.0 billion, up 11% year-over-year; revenues grew 9% YoY. Diluted EPS $4.23 and adjusted diluted EPS $4.28, up 11% YoY. Adjusted operating leverage 2.4% and adjusted efficiency ratio 52%. Return on equity ~17.9% and book value per share up 10% YoY. Internal capital generation of 80 basis points in the quarter.
Read all positive updates
Company Guidance
Management reiterated full‑year guidance: all‑bank net interest income excluding trading is up 7% year‑to‑date and on track for mid‑single‑digit growth, expense growth is ~5% YTD (consistent with mid‑single‑digit guidance), and the bank expects positive all‑bank operating leverage for the year with Canadian Banking delivering 1–2% operating leverage and Canadian Banking margins expected to be relatively stable next quarter. They guided the non‑TEB effective tax rate toward the high end of the 21–23% range, expect CET1 to trend toward the midpoint of 12.5–13.5% over time (after deploying ~85 bps of capital this quarter), will continue disciplined buybacks/dividends (5.6M shares repurchased for ≈$1.6B this quarter; total payout ratio 69%; medium‑term dividend target 40–50% payout), expect Moneris to add ~10 bps to CET1 in Q1‑2027, aim to generate $700M–$1B of enterprise value from AI by end‑FY2027, note U.S. efficiency ratio improved to 75% YTD (targeting low‑70s), and expect full‑year provisions on impaired loans to remain within prior guidance.Royal Bank Of Canada Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
72
Positive
Cash Flow
68
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 142.86B | 137.36B | 54.11B | 49.00B | 48.50B | 50.45B |
| Gross Profit | 69.33B | 62.17B | 54.11B | 49.00B | 48.50B | 50.45B |
| EBITDA | 30.76B | 28.73B | 2.98B | 2.85B | 2.65B | 2.59B |
| Net Income | 22.75B | 20.36B | 16.23B | 14.61B | 15.79B | 16.04B |
Balance Sheet | ||||||
| Total Assets | 2.50T | 2.33T | 2.17T | 2.01T | 1.92T | 1.71T |
| Cash, Cash Equivalents and Short-Term Investments | 64.14B | 165.28B | 167.13B | 212.00B | 240.60B | 231.03B |
| Total Debt | 13.23B | 834.96B | 779.52B | 774.59B | 699.12B | 567.25B |
| Total Liabilities | 2.35T | 2.19T | 2.04T | 1.89T | 1.81T | 1.61T |
| Stockholders Equity | 145.04B | 139.09B | 127.09B | 117.66B | 108.06B | 98.67B |
Cash Flow | ||||||
| Free Cash Flow | 45.84B | 52.98B | 20.86B | 23.35B | 19.44B | 58.86B |
| Operating Cash Flow | 48.19B | 55.22B | 23.14B | 26.08B | 21.94B | 61.04B |
| Investing Cash Flow | -80.49B | -68.57B | -20.89B | -28.27B | -57.05B | -57.35B |
| Financing Cash Flow | 61.68B | -6.71B | -8.15B | -9.83B | -2.19B | -5.93B |
Royal Bank Of Canada Technical Analysis
Negative
282.62
Price Trends
292.16
Negative
271.78
Positive
247.31
Positive
Market Momentum
-1.96
Positive
40.02
Neutral
34.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RY, the sentiment is Negative. The current price of 282.62 is below the 20-day moving average (MA) of 292.15, below the 50-day MA of 292.16, and above the 200-day MA of 247.31, indicating a neutral trend. The MACD of -1.96 indicates Positive momentum. The RSI at 40.02 is Neutral, neither overbought nor oversold. The STOCH value of 34.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | C$399.49B | 18.38 | 15.95% | 2.16% | 4.67% | 19.97% | |
70 Outperform | C$151.80B | 15.67 | 15.24% | 2.52% | 0.14% | 26.17% | |
68 Neutral | C$160.00B | 16.69 | 11.06% | 3.62% | -3.29% | 43.84% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | C$82.56B | 18.63 | 13.77% | 2.19% | 7.97% | 17.60% | |
64 Neutral | C$169.47B | 19.41 | 10.58% | 2.63% | -1.74% | 7.63% | |
61 Neutral | C$280.24B | 19.75 | 11.85% | 2.56% | -10.53% | -20.00% |
* Financial Sector Average
TSE:RY
Royal Bank Of Canada
283.47
89.28
45.97%
TSE:BMO
Bank Of Montreal
238.69
77.92
48.47%
TSE:BNS
Bank Of Nova Scotia
128.84
46.72
56.89%
TSE:CM
Canadian Bank of Commerce
159.16
56.41
54.91%
TSE:TD
Toronto Dominion Bank
167.84
67.99
68.09%
TSE:NA
National Bank of Canada
212.93
72.54
51.67%
Royal Bank Of Canada Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
RBC, BMO to Sell Moneris to Francisco Partners in $2 Billion Deal
Positive
Aug 10, 2026
Royal Bank of Canada and BMO Financial Group have agreed to sell their jointly owned payments subsidiary Moneris Solutions Corporation to global technology investor Francisco Partners in a cash deal valued at about $2 billion, with RBC entitled to...
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.