Royal Bank of Canada Valuation

Q: What is the Fair Price of RY.PRM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RY.PRM (CA$24.25) is trading below our estimate of [[fair value]] (CA$35.07)

Is RY.PRM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RY.PRM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RY.PRM (CA$24.25) is trading below our estimate of fair value (CA$35.07)

Significantly Below Fair Value: RY.PRM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RY.PRM?

Key metric: As RY.PRM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for RY.PRM. This is calculated by dividing RY.PRM's market cap by their current earnings.
What is RY.PRM's PE Ratio?
PE Ratio	15.5x
Earnings	CA$15.90b
Market Cap	CA$245.79b

RY.PRM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	7.4x

Price to Earnings Ratio vs Peers

How does RY.PRM's PE Ratio compare to its peers?

The above table shows the PE ratio for RY.PRM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	15.1x
TD Toronto-Dominion Bank	17.7x	17.2%	CA$136.0b
BMO Bank of Montreal	15.5x	11.8%	CA$97.5b
BNS Bank of Nova Scotia	13.9x	8.6%	CA$97.8b
CM Canadian Imperial Bank of Commerce	13.4x	7.3%	CA$86.4b
RY.PRM Royal Bank of Canada	15.5x	2.1%	CA$245.8b

Price-To-Earnings vs Peers: RY.PRM is expensive based on its Price-To-Earnings Ratio (15.5x) compared to the peer average (15.1x).

Price to Earnings Ratio vs Industry

How does RY.PRM's PE Ratio compare vs other companies in the North American Banks Industry?

4 Companies	Price / Earnings	Estimated Growth	Market Cap

4 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: RY.PRM is expensive based on its Price-To-Earnings Ratio (15.5x) compared to the North American Banks industry average (13.4x).

Price to Earnings Ratio vs Fair Ratio

What is RY.PRM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RY.PRM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.5x
Fair PE Ratio	13.8x

Price-To-Earnings vs Fair Ratio: RY.PRM is expensive based on its Price-To-Earnings Ratio (15.5x) compared to the estimated Fair Price-To-Earnings Ratio (13.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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