Update shared on28 Aug 2025
Fair value Increased 5.01%Analysts have raised their price target for Royal Bank of Canada to CA$201.93, citing stronger-than-expected Q3 earnings, improving credit quality, and strategic growth opportunities in wealth management.
Analyst Commentary
- Bullish analysts are raising price targets due to Royal Bank of Canada posting fiscal Q3 earnings above expectations.
- Improved sequential earnings are anticipated, driven by declining losses on performing loans and higher net interest income.
- The outlook for Canadian banks remains constructive, though ongoing concerns persist regarding tariffs and upcoming mortgage renewals.
- There is recognition of strong recent earnings momentum across Canadian banks, even as some macroeconomic headwinds remain.
- Potential involvement in major industry M&A, such as possible interest in Northern Trust assets, is considered a strategic opportunity for RBC’s growth in wealth management.
What's in the News
- Royal Bank of Canada (RBC) and Bank of Montreal (BMO) are exploring the sale of their payments joint venture Moneris, which could be valued up to $2 billion; Moneris is among Canada's largest payment processors, handling one-third of national business transactions (Reuters, Key Developments).
- RBC has launched a no monthly fee Day to Day Banking account for Indigenous people as part of its Reconciliation Action Plan, and is extending no-fee and low-cost solutions to other groups, including newcomers, students, youth, seniors, and RDSP beneficiaries, aligning with regulatory commitments (Key Developments).
- RBC and WestJet introduced the WestJet RBC World Elite Mastercard for Business, the first Canadian business travel card offering instant top-tier airline status and enhanced earning/rewards features targeted at entrepreneurs and business travelers (Key Developments).
- RBC joined the BDC Business Accelerator Loan Program to provide up to $500,000 in financing to small and medium-sized businesses, reinforcing support for Canadian entrepreneurship and earning RBC the Best SME Bank in Canada and North America title for a fourth consecutive year (Key Developments).
- RBC announced a share repurchase program, authorizing up to 35 million common shares (2.48% of outstanding shares) to manage capital and generate shareholder value, with the program running until June 2026 (Key Developments).
Valuation Changes
Summary of Valuation Changes for Royal Bank of Canada
- The Consensus Analyst Price Target has risen from CA$192.29 to CA$201.93.
- The Consensus Revenue Growth forecasts for Royal Bank of Canada has significantly fallen from 5.1% per annum to 3.7% per annum.
- The Future P/E for Royal Bank of Canada has risen slightly from 16.64x to 17.39x.
Disclaimer
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