AnalystConsensusTarget updated the narrative for RY

Analysts have recently increased their average price target for Royal Bank of Canada to C$218, reflecting expectations for continued earnings growth and stronger profitability metrics.

Analyst Commentary

Recent research from the street reflects a wide range of analyst opinion on Royal Bank of Canada, with several making notable adjustments to price targets and ratings. The following takeaways summarize the current sentiment from both bullish and bearish perspectives.

• Bullish analysts continue to raise price targets, highlighting expectations for strong earnings growth and ongoing improvements in profitability metrics.
• Several recent upgrades point to robust third-quarter results and a positive outlook on growth and profitability, which is driving increased confidence in the stock’s future performance.
• Some price target revisions have cited above-consensus earnings, signaling that the bank is outperforming expectations at a fundamental level.
• Despite a range of views, there is consensus among bullish analysts that the Canadian banking sector, including Royal Bank of Canada, is well positioned to beat conservative estimates going forward.

• Bearish analysts have cited current valuation metrics, suggesting the stock’s implied return relative to recent price targets may be limited after recent earnings-driven rallies.
• Some downgrades focus on the outlook for the Canadian banking sector as a whole, warning that potential headwinds such as tariffs and upcoming mortgage renewals could impact growth momentum.
• While profitability is expected to remain strong, there are concerns that upside could be constrained by these macroeconomic factors and cautious outlooks beyond the current fiscal year.

What's in the News

• Royal Bank of Canada (RBC) and Bank of Montreal (BMO) have placed their Canadian payments joint venture, Moneris, up for sale. The business is potentially valued as high as $2 billion (Reuters).
• EQT AB is considering a U.S. initial public offering for waste management business Reworld. RBC, Goldman Sachs, and JPMorgan are advising on a possible listing that could raise at least $1 billion (Bloomberg).
• RBC announced its intention, pending regulatory approval, to redeem all outstanding Non-Viability Contingent Capital (NVCC) Non-Cumulative First Preferred Shares, Series BH and BI, on December 8, 2025, totaling $300 million in capital.
• RBC is emerging as the leading candidate to acquire UK wealth manager Evelyn Partners, valued at up to £2.5 billion, after integrating Brewin Dolphin in a previous acquisition.
• RBC has launched a no monthly fee bank account for Indigenous Peoples in Canada as part of its inaugural Reconciliation Action Plan, in partnership with Indigenous consultants and community stakeholders.

Valuation Changes

• Discount Rate: decreased from 7.28% to 7.12%, reflecting slightly lower perceived risk.
• Revenue Growth: increased marginally from 4.43% to 4.47%, indicating a modest improvement in forward revenue expectations.
• Net Profit Margin: edged up from 29.88% to 29.97%, showing a slight rise in projected profitability.
• Future P/E: declined from 17.47x to 17.32x, which suggests a minor reduction in the stock’s forward valuation multiple.
• Fair Value Estimate: remained unchanged at CA$211.07, which indicates stability in the intrinsic value assessment.