Published December 3, 2025 – Informational article, not investment advice.
Royal Bank of Canada stock is back in the spotlight after the country’s largest lender delivered record fiscal 2025 results, raised its dividend and lifted its profitability target for 2026. With the share price hovering near all‑time highs and analyst targets pointing to only modest upside, investors are asking the obvious question: is RBC stock still a buy after this big run?
Below is a detailed look at today’s news, the latest numbers and what analysts now expect for Royal Bank of Canada (TSX: RY, NYSE: RY).
Where Royal Bank of Canada stock stands today
On the Toronto Stock Exchange, Royal Bank of Canada closed at about C$216 per share on December 2, 2025, giving it a market capitalization of roughly C$301 billion. [1]
On the NYSE, the U.S.-listed RY shares were recently trading around US$154, implying a market value near US$218 billion, making RBC one of the world’s largest banks by market cap. [2]
Valuation looks full by historical standards:
- Trailing P/E around 16–16.5x and forward P/E near 14x on the TSX, above RBC’s recent average and the broader North American bank sector. [3]
- Separate analysis of the NYSE listing pegs the P/E at about 16.1x, notably above its 12‑month average near 14.5x. [4]
In other words, the market is already pricing in a premium for quality and earnings growth – which makes today’s earnings beat and guidance shift especially important.
Q4 2025: Capital markets & wealth drive a big earnings beat
Royal Bank of Canada reported fiscal Q4 2025 net income of C$5.43 billion, up about 29% year over year, with diluted EPS of C$3.76 and adjusted EPS of C$3.85. That adjusted figure beat analyst expectations of roughly C$3.53. [5]
Key drivers in the quarter:
- Capital Markets
- Wealth Management
- Wealth management net income climbed to around C$1.28 billion, a gain of more than 30% year over year, as fee‑based client assets grew and markets remained supportive. [8]
- Credit costs
- Provisions for credit losses (PCL) in Q4 were just over C$1.0 billion, up about 20% from a year earlier and slightly above analyst forecasts, reflecting higher provisions in personal, commercial and capital markets portfolios. [9]
- The PCL on loans ratio in the quarter was 39 basis points, up modestly, but management continues to describe credit quality as manageable.
Despite higher credit costs, RBC posted record pre‑provision, pre‑tax earnings of C$7.8 billion in Q4, up roughly 29% from a year earlier, highlighting the power of its fee-heavy businesses even as traditional loan growth slows. [10]
Return on equity (ROE) for the quarter came in at about 16.8%, comfortably above most global peers and up more than 2 percentage points year over year. [11]
Full-year 2025: Record profits, stronger capital and HSBC Canada in the fold
For the fiscal year ended October 31, 2025, Royal Bank of Canada reported: [12]
- Net income of C$20.4 billion, up 25% from 2024
- Diluted EPS of C$14.07, also up 25%
- Adjusted net income of C$20.9 billion, up 20%
- Adjusted diluted EPS of C$14.43, up 19%
- 2025 ROE of 16.3%, versus 14.4% last year
- Adjusted ROE of 16.7%, up from 15.5%
- Pre‑provision, pre‑tax earnings of C$30 billion, up 30% year over year
Total provisions for credit losses for the year were C$4.4 billion, with the PCL on impaired loans ratio rising to 37 bps, reflecting a slower economy, higher unemployment and trade-related pressures particularly in commercial sectors. [13]
The acquisition of HSBC Bank Canada was a meaningful contributor:
- 2025 results include five additional months of HSBC Canada earnings, boosting personal and commercial banking revenue and deposit balances. [14]
- Integration costs over the life of the deal total about C$1.4 billion, and RBC says integration activities are now largely complete. [15]
Capital remains a key strength. RBC’s CET1 ratio stood at 13.5% at year‑end, comfortably above regulatory minimums and providing room for both growth and capital returns. [16]
Dividend hike and a higher ROE target for 2026
Alongside earnings, Royal Bank of Canada’s board announced a 10‑cent increase to the quarterly common share dividend, taking it from C$1.54 to C$1.64 per share – roughly a 6–6.5% hike. [17]
- The higher dividend is payable on or after February 24, 2026 to shareholders of record on January 26, 2026. [18]
- Based on the current TSX share price, the forward dividend yield is around 3% for Canadian investors and roughly 2.8–3.0% on the U.S. listing, depending on FX. [19]
RBC also raised its profitability ambition:
For fiscal 2026, the bank has revised its ROE financial objective to 17%+, citing improving revenue productivity and cost efficiencies from strategic initiatives, including the HSBC integration and ongoing technology investment. [20]
From a dividend‑growth perspective, RBC continues to look like a classic Canadian blue chip:
- Several independent trackers highlight 15 consecutive years of dividend increases and a 10‑year dividend growth rate of roughly 6–7% annually. [21]
- Commentators frequently point to more than 150 years of uninterrupted dividends, underscoring its role as a core income holding for many Canadian retirees. [22]
How analysts see Royal Bank of Canada stock now
Consensus ratings
Analysts remain broadly positive but are not unanimous bulls:
- On the TSX, MarketBeat aggregates 14 analyst ratings with a “Moderate Buy” consensus: 9 buys (including strong buys) and 5 holds. [23]
- Another aggregation (Valueinvesting.io) counts 23 analysts and labels the stock a “BUY”, reinforcing the bias toward positive recommendations. [24]
- In the U.S., one research provider tracking the NYSE listing currently shows a “Strong Buy” recommendation from its single covering analyst. [25]
Price targets: modest upside from here
Across major services, 12‑month price targets cluster only slightly above today’s share price:
TSX listing (RY.TO)
- MarketBeat: average target ~C$216.4, basically flat versus the current C$216.2, with a range from about C$189 to C$238. [26]
- Valueinvesting.io: average target ~C$218.0, low C$199.98, high C$238.35, implying roughly 5% upside at the midpoint. [27]
- TradingView’s compiled target sits a bit higher around C$222.9, again with a C$206–C$238 range. [28]
- TipRanks highlights a recent Buy rating with a C$238 target from one covering analyst, and its AI “Spark” model calls the stock an “Outperform” while warning of short-term overbought conditions. [29]
NYSE listing (RY)
- WallStreetZen shows a US$162 one‑year target versus a recent price around US$153, implying roughly 6% upside, and characterizes the stock as a “Strong Buy” based on that lone U.S. analyst. [30]
Taken together, mainstream equity research suggests low single‑digit capital appreciation over the next year, plus the ~3% dividend yield, for a mid‑single‑digit total return profile—assuming consensus is right.
Earnings and growth forecasts
On the earnings side, forecasts continue to point higher even after RBC’s record 2025:
- RBC just delivered C$14.07 in diluted EPS for 2025. [31]
- External models previously projected 2026 EPS around C$15.5 and 2027 EPS around C$17, implying mid‑teens annual EPS growth from here. [32]
- One forecast provider estimates annual earnings growth of roughly 21–22% over 2025–2027, slower than the broader U.S. market but still robust for a mature bank, with revenue growth near 16% annually. [33]
At the same time, at least one quantitative forecasting site flags short‑term downside risk based on technical and sentiment factors, with a 30‑day price projection well below the current U.S. price—illustrating how near-term models can diverge sharply from fundamental analyst targets. [34]
Strategic themes: AI, U.S. growth and HSBC Canada synergies
Recent company commentary and earlier 2025 updates highlight three strategic levers that matter for the stock’s medium‑term story.
1. AI and technology productivity
At its March 2025 Investor Day, RBC emphasized that artificial intelligence will be central to its next phase of growth, aiming to use AI to personalize customer experiences, improve risk management and drive cost efficiency across the bank. [35]
If executed well, these investments could:
- Support the new 17%+ ROE objective
- Help offset margin pressure if rates fall or competition intensifies
- Strengthen RBC’s position in higher‑return fee businesses like wealth and capital markets
2. HSBC Canada integration
The acquisition of HSBC Canada has expanded RBC’s commercial footprint, added deposits and is expected to deliver hundreds of millions of dollars in annual cost synergies by FY 2026, according to prior investor presentations and third‑party analysis. [36]
With integration largely complete and the costs now behind it, HSBC Canada should increasingly function as a pure earnings and efficiency tailwind rather than a drag on results.
3. Growth in the U.S. via City National and wealth
RBC continues to lean into U.S. capital markets and wealth management, particularly through City National Bank and U.S. wealth franchises. Recent quarters saw:
- Strong revenue growth in U.S. wealth management, with net interest income and fee-based assets both rising. [37]
- Elevated trading and deal activity supporting cross‑border capital markets income. [38]
For investors, this U.S. expansion offers diversification away from the more mature Canadian retail market, though it also introduces exposure to U.S. credit cycles and regulatory dynamics.
Key risks hanging over RBC stock
Even after a very strong year, there are several clear risk factors that could shape Royal Bank of Canada’s share price in 2026:
- Credit cycle & Canadian housing
- Provisions for credit losses have trended higher, with 2025 PCLs exceeding C$4.4 billion and Q4 PCL above C$1 billion, reflecting pressure in consumer and commercial portfolios. [39]
- Analysts remain focused on Canadian consumer health, mortgage renewals and unemployment, which were already highlighted as concerns for the big six banks even before today’s results. [40]
- Valuation risk
- The big six Canadian banks now trade at around 12.9x forward earnings on average, about 23% above their 10‑year average, leading several strategists to caution that any earnings miss could hit multiples hard. [41]
- RBC, as the sector leader, tends to command an even higher premium, limiting upside if earnings merely meet – rather than beat – expectations.
- Macro and trade uncertainty
- Ongoing U.S.–Canada trade frictions and tariff uncertainty continue to weigh on business confidence, with management acknowledging that some commercial clients are delaying investment decisions. [42]
- A weaker Canadian housing market and rising unemployment have been repeatedly cited as headwinds in recent coverage. [43]
- Regulatory and capital changes
- As one of the world’s largest and most systemically important banks, RBC remains exposed to potential changes in capital requirements, leverage rules and mortgage underwriting standards, which can affect returns even if topline growth remains strong. [44]
Is Royal Bank of Canada stock a buy after its 2025 rally?
Different types of investors will likely view today’s setup very differently.
For income-focused, long-term investors
RBC still looks like a textbook high‑quality dividend compounder:
- Long history of paying – and regularly increasing – dividends
- Fresh ~6% dividend hike to C$1.64 per quarter
- Forward yield around 3% paired with a stronger 17%+ ROE target and a CET1 ratio of 13.5%. [45]
For investors prioritizing stability and income over explosive growth, RBC’s combination of scale, diversification and conservative risk culture remains attractive.
For value and total-return investors
The picture is more nuanced:
- The stock has already enjoyed a double‑digit rally in 2025, with one analysis estimating around 19% year‑to‑date gains as of late October, and further strength into earnings. [46]
- Consensus expects only low single‑digit upside from here on most price‑target models, suggesting that much of the good news is already priced in. [47]
Several research pieces frame RBC as “near fair value”: a high‑quality compounder that can continue to deliver steady, mid‑teens EPS growth and mid‑single‑digit total returns over time, but where upside may be incremental rather than dramatic unless macro conditions and credit outcomes surprise to the upside. [48]
Bottom line
As of December 3, 2025, Royal Bank of Canada stock sits at the intersection of excellent fundamentals and stretched—but not extreme—valuations:
- Record 2025 earnings, a meaningful dividend hike and a higher 2026 ROE target support the bull case. [49]
- Rising credit costs, elevated sector valuations and macro uncertainty around housing and trade are the main counterweights. [50]
For investors already holding RBC, the latest results reinforce its status as a core long‑term financial holding. Potential new buyers may prefer to wait for pullbacks or broader market volatility to improve the risk‑reward profile, especially given how closely the current price hugs consensus targets.
As always, this article is informational only and not investment advice. Anyone considering Royal Bank of Canada stock should weigh their own risk tolerance, tax situation and portfolio needs, and, if necessary, consult a qualified financial advisor.
References
1. www.marketbeat.com, 2. companiesmarketcap.com, 3. ca.finance.yahoo.com, 4. public.com, 5. www.newswire.ca, 6. www.mpamag.com, 7. www.reuters.com, 8. www.mpamag.com, 9. www.newswire.ca, 10. www.newswire.ca, 11. www.newswire.ca, 12. www.newswire.ca, 13. www.newswire.ca, 14. www.newswire.ca, 15. www.newswire.ca, 16. www.newswire.ca, 17. www.newswire.ca, 18. investingnews.com, 19. www.gurufocus.com, 20. www.newswire.ca, 21. www.dividend.com, 22. www.fool.ca, 23. www.marketbeat.com, 24. valueinvesting.io, 25. www.wallstreetzen.com, 26. www.marketbeat.com, 27. valueinvesting.io, 28. www.tradingview.com, 29. www.tipranks.com, 30. www.wallstreetzen.com, 31. www.newswire.ca, 32. www.wallstreetzen.com, 33. www.wallstreetzen.com, 34. stockscan.io, 35. www.reuters.com, 36. www.tikr.com, 37. www.newswire.ca, 38. www.reuters.com, 39. www.newswire.ca, 40. www.reuters.com, 41. www.reuters.com, 42. www.reuters.com, 43. www.reuters.com, 44. www.newswire.ca, 45. www.newswire.ca, 46. www.tikr.com, 47. www.marketbeat.com, 48. www.tikr.com, 49. www.newswire.ca, 50. www.reuters.com
