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HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 61.4GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
58.6%
Sector: 8.5%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, ROYAL BANK OF CANADA (RY) receives a "Hold" rating with a composite score of 58.6/100, ranked #347 out of 4446 stocks. Key factor scores: Quality 61/100, Value 62/100, Momentum 55/100. This is quantitative analysis only — not investment advice.
ROYAL BANK OF CANADA (RY) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ROYAL BANK OF CANADA Do?
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. ROYAL BANK OF CANADA (RY) is classified as a mega-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO David I. McKay and employs approximately 91,400 people, headquartered in TORONTO, Ontario. With a market capitalization of $227.6B, RY is one of the largest companies in the Financials sector.
ROYAL BANK OF CANADA (RY) Stock Rating — Hold (April 2026)
As of April 2026, ROYAL BANK OF CANADA receives a Hold rating with a composite score of 58.6/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.RY ranks #347 out of 4,446 stocks in our coverage universe. Within the Financials sector, ROYAL BANK OF CANADA ranks #122 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
RY Stock Price and 52-Week Range
ROYAL BANK OF CANADA (RY) currently trades at $171.91. The stock gained $1.12 (0.7%) in the most recent trading session. The 52-week high for RY is $176.19, which means the stock is currently trading -2.4% from its annual peak. The 52-week low is $106.10, putting the stock 62.0% above its annual trough. Recent trading volume was 1.2M shares, reflecting moderate market activity.
Is RY Overvalued or Undervalued? — Valuation Analysis
ROYAL BANK OF CANADA (RY) carries a value factor score of 62/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The price-to-book ratio stands at 2.32x, versus the sector average of 1.22x. The price-to-sales ratio is 2.23x, compared to 0.90x for the average Financials stock. On an enterprise value basis, RY trades at 2.78x EV/EBITDA, versus 3.26x for the sector.
Overall, RY's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
ROYAL BANK OF CANADA Profitability — ROE, Margins, and Quality Score
ROYAL BANK OF CANADA (RY) earns a quality factor score of 61/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 58.6%, compared to the Financials sector average of 8.5%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 3.5% versus the sector average of 1.2%.
Net profit margin stands at 56.4%, versus 17.7% for the average Financials stock. Revenue growth is running at 22.2% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
RY Debt, Balance Sheet, and Financial Health
ROYAL BANK OF CANADA has a debt-to-equity ratio of 36.0%, compared to the Financials sector average of 121.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. Total debt on the balance sheet is $35.61B. Cash and equivalents stand at $26.43B.
RY has a beta of 0.59, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ROYAL BANK OF CANADA is 93/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ROYAL BANK OF CANADA Revenue and Earnings History — Quarterly Trend
In TTM 2026, ROYAL BANK OF CANADA reported revenue of $25.80B. Net income for the quarter was $14.54B. Gross margin was 92.1%. Operating income came in at $2.04B.
In FY 2025, ROYAL BANK OF CANADA reported revenue of $25.80B. Net income for the quarter was $14.54B. Gross margin was 92.1%. Revenue grew -33.3% year-over-year compared to FY 2024. Operating income came in at $2.04B.
In FY 2024, ROYAL BANK OF CANADA reported revenue of $38.66B. Net income for the quarter was $11.65B. Gross margin was -1.0%. Revenue grew 10.1% year-over-year compared to FY 2023. Operating income came in at $39.07B.
In FY 2023, ROYAL BANK OF CANADA reported revenue of $35.13B. Net income for the quarter was $10.53B. Gross margin was 0.7%. Revenue grew 71.5% year-over-year compared to FY 2022. Operating income came in at $34.89B.
Over the past 8 quarters, ROYAL BANK OF CANADA has demonstrated a growth trajectory, with revenue expanding from $20.59B to $25.80B. Investors analyzing RY stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
RY Dividend Yield and Income Analysis
ROYAL BANK OF CANADA (RY) does not currently pay a dividend. This is common among growth-oriented companies in the Banking industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Financials dividend stocks may want to explore other Financials stocks or use the stock screener to filter by dividend yield.
RY Momentum and Technical Analysis Profile
ROYAL BANK OF CANADA (RY) has a momentum factor score of 55/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 54/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 25/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
RY vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing RY against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full RY vs S&P 500 (SPY) comparison to assess how ROYAL BANK OF CANADA stacks up against the broader market across all factor dimensions.
RY Next Earnings Date
No upcoming earnings date has been announced for ROYAL BANK OF CANADA (RY) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy RY? — Investment Thesis Summary
ROYAL BANK OF CANADA presents a balanced picture with arguments on both sides. The quality score of 61/100 indicates above-average profitability and business fundamentals. The value score of 62/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 93/100) reduces downside risk.
In summary, ROYAL BANK OF CANADA (RY) earns a Hold rating with a composite score of 58.6/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on RY stock.
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Institutional Research Dossier
ROYAL BANK OF CANADA (RY) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Royal Bank of Canada (RY) currently holds a 'Hold' rating, supported by a composite score of 59.7/100. This rating reflects a balanced view of the bank's strengths in stability and profitability against concerns regarding its investment and momentum scores. While RY demonstrates robust financial performance and a strong market position, its valuation and growth prospects warrant a cautious approach.
The primary driver of the 'Hold' rating is the combination of a relatively high valuation compared to its growth rate and the inherent cyclicality of the financial sector. While RY's stability score is impressive, indicating lower volatility and drawdown risk, investors should carefully consider the potential impact of macroeconomic headwinds and regulatory changes on the bank's future performance. The key takeaway is that RY represents a solid, stable investment within the Canadian banking sector, but its current valuation suggests limited upside potential, justifying a neutral stance.
Business Strategy & Overview
Royal Bank of Canada (RY) operates as a diversified financial services company, offering a wide array of products and services across five key segments: Personal & Commercial Banking, Wealth Management, Insurance, Investor & Treasury Services, and Capital Markets. The Personal & Commercial Banking segment, the cornerstone of RY's operations, provides traditional banking services such as deposit accounts, loans, and credit cards to individuals and small to medium-sized businesses. This segment leverages a vast network of branches and ATMs, complemented by a growing mobile and online presence, to serve a broad customer base.
RY's Wealth Management segment caters to high-net-worth and ultra-high-net-worth individuals, offering advice-based solutions and strategies. This segment is crucial for generating stable fee income and diversifying RY's revenue streams. The Insurance segment provides a range of insurance products, including life, health, home, and auto insurance, further enhancing RY's diversification and cross-selling opportunities. The Investor & Treasury Services segment offers asset servicing, custody, and treasury services to institutional clients, while the Capital Markets segment provides corporate and investment banking services, including equity and debt origination, advisory services, and trading services.
RY's strategic positioning within the Canadian banking sector is characterized by its dominant market share and strong brand recognition. The company's focus on innovation and digital transformation is evident in its investments in mobile banking and online platforms. RY's acquisition strategy has also played a key role in its growth, allowing it to expand its product offerings and geographic reach. The bank's commitment to risk management and regulatory compliance is paramount, given the highly regulated nature of the financial services industry.
The Canadian banking sector is characterized by a high degree of concentration, with a few large players dominating the market. This oligopolistic structure provides RY with a degree of pricing power and stability. However, the sector is also subject to intense competition from both traditional banks and non-bank financial institutions, particularly in areas such as online lending and payment processing. RY's ability to adapt to changing customer preferences and technological advancements will be critical to its long-term success.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
22.2%
Sector: 9.4%
+137% VS SCTR
Economic Moat Analysis
Royal Bank of Canada possesses a Narrow economic moat. This assessment is based on a combination of factors, primarily its strong brand reputation and the regulatory environment in Canada, which creates barriers to entry for new competitors. While RY doesn't possess the wide moat characteristics of companies with significant network effects or structural cost advantages, its established position and customer loyalty provide a degree of sustainable competitive advantage.
The Canadian banking sector is highly concentrated, with a small number of large banks controlling a significant portion of the market. This oligopolistic structure, coupled with stringent regulatory requirements, makes it difficult for new players to enter the market and compete effectively. RY's long history and strong brand recognition contribute to customer trust and loyalty, further reinforcing its competitive position. However, the increasing prevalence of fintech companies and online banking platforms poses a potential threat to RY's market share, particularly among younger customers.
Switching costs in the banking industry are moderate. While customers may face some inconvenience when switching banks, the process is generally not overly burdensome. This limits RY's ability to retain customers solely based on switching costs. Intangible assets, such as brand reputation and customer relationships, are more important drivers of RY's competitive advantage. The bank's investments in technology and innovation also contribute to its ability to differentiate itself from competitors and provide superior customer service.
RY does not possess a significant cost advantage over its peers. The bank's operating expenses are generally in line with those of other large Canadian banks. Efficient scale is also not a major source of competitive advantage, as the Canadian banking market is large enough to support multiple players. Therefore, RY's narrow moat is primarily derived from its brand reputation and the regulatory barriers to entry in the Canadian banking sector. The bank must continue to invest in innovation and customer service to maintain its competitive position in the face of increasing competition from fintech companies and other non-bank financial institutions.
Financial Health & Profitability
Royal Bank of Canada demonstrates a mixed financial profile. The company's revenue has shown considerable volatility over the past several years, ranging from $20.47B in FY2020 to $38.66B in FY2024, before settling at $25.80B in the most recent fiscal year. This volatility suggests sensitivity to macroeconomic conditions and market fluctuations. Net income has also fluctuated, peaking at $14.54B in FY2025 but showing significant variability in prior years. The free cash flow (FCF) generation is particularly concerning, with negative FCF in FY2025 and several prior years, indicating potential challenges in funding operations and investments through internally generated cash.
The company's profitability metrics, such as ROE (58.6%), are significantly higher than the sector average (8.5%), suggesting superior efficiency in generating profits from equity. Net margin (56.4%) also far exceeds the sector average (17.8%), indicating strong cost control and pricing power. However, the gross margin and operating margin figures are inconsistent across the historical data, with some years showing negative or unusually high values, raising questions about the sustainability of these margins.
RY's balance sheet reflects a moderate level of leverage, with a debt-to-equity ratio of 36.00, which is significantly lower than the sector average of 115.00. This suggests a relatively conservative approach to debt financing. The company's total cash balance of $26.43B provides a buffer against short-term liquidity risks. However, the negative free cash flow in the most recent year raises concerns about the company's ability to maintain its cash position in the long term.
Analyzing the quarterly financial history reveals a lack of consistent revenue and earnings growth. While some years show strong performance, others are characterized by declines or stagnation. The volatility in FCF is particularly noteworthy, with large swings from positive to negative values. This suggests that RY's financial performance is highly sensitive to external factors and that the company may face challenges in generating consistent cash flow. Overall, RY's financial health appears to be solid but not without its vulnerabilities, particularly in terms of revenue stability and cash flow generation.
Valuation Assessment
Royal Bank of Canada's valuation presents a mixed picture. The company's P/E ratio is not available, making a direct comparison to the sector average of 15.5x impossible. However, the EV/EBITDA ratio of 2.7x is significantly lower than the sector average of 3.5x, suggesting that RY may be undervalued on an enterprise value basis. This could indicate that the market is not fully appreciating RY's earnings potential or that there are concerns about its future growth prospects.
Given the negative free cash flow in the most recent year, a traditional FCF yield analysis is not meaningful. However, the historical FCF data reveals significant volatility, making it difficult to assess RY's long-term FCF generation potential. A discounted cash flow (DCF) analysis would be necessary to determine a fair value for the stock, but this would require making assumptions about future growth rates and discount rates.
Compared to its historical valuation, RY's current EV/EBITDA ratio is relatively low. This could be due to a number of factors, including concerns about the Canadian economy, regulatory changes, or increased competition in the banking sector. However, it could also indicate that the stock is undervalued and that there is potential for capital appreciation.
Overall, RY's valuation appears to be fair to slightly undervalued based on its EV/EBITDA ratio. However, the lack of a P/E ratio and the volatility in FCF make it difficult to draw definitive conclusions. Investors should carefully consider the company's growth prospects and risk factors before making an investment decision. A more detailed valuation analysis, including a DCF model, would be necessary to determine a more precise fair value for the stock.
Risk & Uncertainty
Royal Bank of Canada faces several specific risks that could impact its financial performance and valuation. One of the most significant risks is regulatory risk. The financial services industry is heavily regulated, and changes in regulations could increase RY's compliance costs, limit its business activities, or reduce its profitability. For example, changes in capital requirements or lending regulations could negatively impact RY's ability to generate revenue and earnings.
Another key risk is competition. The Canadian banking sector is highly competitive, and RY faces competition from both traditional banks and non-bank financial institutions. The increasing prevalence of fintech companies and online banking platforms poses a particular threat to RY's market share, particularly among younger customers. RY must continue to invest in innovation and customer service to maintain its competitive position.
Credit risk is also a significant concern. RY's lending activities expose it to the risk of borrowers defaulting on their loans. A deterioration in the Canadian economy or a rise in interest rates could increase the number of loan defaults, negatively impacting RY's earnings. The company's exposure to the real estate market is particularly noteworthy, given the high level of household debt in Canada.
Finally, operational risk is a constant concern. RY's operations are complex and rely on sophisticated technology systems. A failure of these systems or a cybersecurity breach could disrupt RY's business activities and damage its reputation. The company must invest in robust risk management and cybersecurity measures to mitigate these risks.
Bulls Say / Bears Say
The Bull Case
BULL VIEWRoyal Bank of Canada's dominant market share in the stable Canadian banking sector provides a strong foundation for consistent profitability and dividend payouts.
BULL VIEWRY's high ROE compared to its peers indicates superior efficiency and profitability, suggesting the bank is effectively managing its capital and generating strong returns for shareholders.
BULL VIEWThe bank's relatively low debt-to-equity ratio compared to the sector average demonstrates a conservative financial approach, reducing risk and providing flexibility for future growth opportunities.
The Bear Case
BEAR VIEWRoyal Bank of Canada's volatile revenue and negative free cash flow in the latest fiscal year raise concerns about its ability to sustain growth and fund operations without relying on external financing.
BEAR VIEWThe lack of a readily available P/E ratio and the relatively low EV/EBITDA compared to the sector suggest the market may be discounting RY's future growth prospects or anticipating potential headwinds.
BEAR VIEWIncreased competition from fintech companies and potential regulatory changes in the Canadian banking sector could erode RY's market share and profitability, impacting its long-term financial performance.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score RY and 4,400+ other equities.
ROYAL BANK OF CANADA exhibits a 37% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
3.5%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
—
Sector: 0.0%
Operating Margin
Core business profitability
—
Sector: 21.8%
Net Margin
Bottom-line profitability
56.4%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
