Royal Bank of Canada (TSX: RY) Stock on December 4, 2025: Record Earnings, Dividend Hike and What Comes Next for RY on the TSX

As of December 4, 2025, Royal Bank of Canada (TSX: RY, NYSE: RY) is trading near record highs after reporting record 2025 earnings, raising its dividend and drawing a flurry of fresh analyst updates. For investors following RY stock on the TSX, the key question now is whether the recent rally still leaves room for upside, or if the shares are moving into “hold and collect the dividend” territory. ^[1]

RY Stock Today: Price Action on the TSX and NYSE

On the Toronto Stock Exchange, Royal Bank of Canada closed around C$223–224 on December 4, 2025, after touching intraday highs above C$224. That’s up from C$218.64 the previous session and well above the C$151–220 52‑week range cited just a day earlier, effectively pushing the stock into new high territory. ^[2]

Recent performance has been strong across multiple time frames. One recent analysis notes that RY has climbed about 1.7% over the last week, 5.5% over the past month, and roughly 27% year to date and over the last 12 months, comfortably outpacing the broader Canadian market. ^[3]

On the NYSE, the U.S. listing of Royal Bank of Canada recently traded around US$161, also near its 52‑week high of roughly US$161 after starting the year close to US$106. ^[4]

The rally in RY is part of a broader move higher in Canadian bank stocks that has helped push the S&P/TSX Composite toward record levels in early December, as investors respond to better‑than‑expected bank earnings and growing expectations of a U.S. rate cut. ^[5]

Q4 and Full‑Year 2025: Record Earnings and Strong Segment Performance

Royal Bank of Canada’s latest leg higher has been driven by a strong fiscal Q4 2025 and record full‑year results.

According to the bank’s earnings release for the year ended October 31, 2025, RBC reported: ^[6]

2025 net income of C$20.4 billion, up about 25% year over year
Diluted EPS of C$14.07, also up approximately 25%
Adjusted return on equity (ROE) of 16.7%, up from 15.5% a year earlier

For the fourth quarter, multiple sources report that adjusted earnings came in at about C$3.85 per share, roughly 25% higher than the prior‑year quarter and ahead of analyst expectations (consensus around C$3.53–3.55). ^[7]

Key business lines that drove the beat:

Capital markets: Q4 net income in this segment jumped by more than 45%, supported by stronger trading revenue, higher M&A activity, and increased lending. ^[8]
Wealth management: Earnings in wealth management rose by over 30%, helped by higher assets under management and stronger fee income. ^[9]
HSBC Canada and U.S. expansion: RBC continues to benefit from its acquisition of HSBC Canada and from growth at City National Bank in the United States, which together expand its international footprint and fee‑based revenue base. ^[10]

On the risk side, RBC’s provision for credit losses rose to around C$1 billion in the quarter, slightly above expectations but still described as manageable. Management flagged rising unemployment and a soft housing market as ongoing headwinds, even as the bank’s overall capital and liquidity positions remain strong. ^[11]

Dividend Hike: Higher Payout, Lower Yield

Alongside earnings, Royal Bank of Canada announced another dividend increase – a key driver of interest in RY stock on the TSX.

On December 3, 2025, the bank’s board approved a 10‑cent increase to its quarterly common share dividend, taking it from C$1.54 to C$1.64 per share, effective with the payment scheduled for February 24, 2026 (record date January 27, 2026). ^[12]

At today’s share price in the low‑C$220s, that implies: ^[13]

Annualized dividend: C$6.56 per share
Forward dividend yield: roughly 2.8–3.0%

That yield is noticeably lower than the roughly 4% investors could earn on RY shares earlier in the year, not because the payout has shrunk, but because the share price has risen so sharply. Over the past three years, the dividend has grown at an average rate of around 9% per year, underscoring RBC’s long‑standing income appeal even as the current yield compresses. ^[14]

Several dividend‑focused services now peg Royal Bank of Canada’s forward dividend yield near 3%, still attractive versus government bonds, but no longer the “high‑3s to 4%” that long‑time RBC investors are used to. ^[15]

Valuation Check: RY Stock Looks Fully Valued but Not Excessive

With RY trading near all‑time highs, valuation is front and center.

Data providers tracking the TSX listing show that Royal Bank of Canada now trades at: ^[16]

Trailing P/E (TTM): about 15.5–16× earnings
Forward P/E: roughly 14×
Price‑to‑book (P/B): around 2.2×
Price‑to‑tangible book (P/TBV): around 3×

For context, one analysis notes that Canadian bank stocks overall are trading at roughly 12.9× forward earnings, about 23% above their 10‑year average, after a rally of more than 30% in 2025 for the “Big Six” banks. ^[17]

Separate estimates for the NYSE‑listed RY suggest a current P/E near 16×, a forward P/E in the mid‑14s, and a dividend yield just under 3%, broadly in line with the TSX metrics once exchange rates are considered. ^[18]

Several valuation‑focused commentators now characterize RBC as “fairly valued to fully valued” rather than cheap, arguing that the share price largely reflects the bank’s high‑quality franchise and improved earnings outlook. ^[19]

Analyst Ratings and Price Targets for RY (TSX)

The latest wave of analyst updates since the Q4 print shows broad optimism on fundamentals but more mixed views on upside from today’s price.

Fresh rating actions (December 2025)

BMO Capital Markets raised its price target on RY from C$226 to C$229 while reiterating an “Outperform” rating following the earnings beat, noting that EPS of C$3.85 came in about 8–9% above its forecast and consensus. ^[20]
TD Cowen upgraded Royal Bank of Canada to “Buy” from “Hold” and lifted its target to C$246, citing strong Q4 results and confidence in RBC’s ability to deliver on its medium‑term ROE goals. ^[21]

Consensus price targets

Across different platforms, the 12‑month target picture looks roughly like this:

MarketBeat (TSX: RY) – Average target C$216.43, with a high of C$238 and low of C$189, implying modest downside of about 3% from a recent price near C$224. ^[22]
TipRanks (TSX: RY) – Nine analysts over the last three months show an average target around C$236.66, with a high near C$308.66 and a low of C$208, suggesting roughly 9% upside from a reference price around C$216. ^[23]
TradingView forecast – Aggregated analyst numbers point to a one‑year price target around C$229–C$230, with estimates between C$206 and C$246. ^[24]

For the U.S. listing (NYSE: RY):

TickerNerd reports a median target of roughly US$154–155, with a range from about US$121 to US$164, and characterizes the consensus as “bullish” or “Strong Buy”, although the median target sits slightly below the latest price. ^[25]
Fintel shows a similar one‑year average target near US$155.5, with a range from about US$143 to US$170. ^[26]

Taken together, the consensus view appears to be:

Fundamentals and earnings momentum are strong
Ratings skew largely “Buy/Outperform”
From current levels, the expected 12‑month total return is moderate, with some houses seeing single‑digit upside and others effectively calling the stock fairly valued

Earnings and EPS Forecasts Through 2027

Beyond the next year, analysts still expect steady earnings growth from Royal Bank of Canada.

One compilation of Wall Street estimates shows: ^[27]

2025 EPS forecast (already largely realized by the Q4 print): about C$14.5 per share (US$ basis around 10.0–10.1).
2026 EPS forecast: roughly C$15.7–16.2 per share, depending on the source.
2027 EPS forecast: approaching C$17.3–17.5 per share at the midpoint.

A separate valuation note uses a book value per share of about C$88.30 and an EPS assumption around C$16.18 to frame long‑term returns, arguing that with a P/B multiple near 2× and a dividend yield near 3%, total annual returns will likely track mid‑single‑digit earnings and dividend growth rather than deliver another explosive re‑rating from here. ^[28]

Growth Drivers: HSBC Canada, AI and a Friendlier OSFI

HSBC Canada and U.S. Expansion

RBC continues to integrate its HSBC Canada acquisition, which brings a strong presence in international banking, affluent clients and trade finance. Combined with growth at City National Bank in the U.S., this strengthens RBC’s mix of fee‑based and cross‑border businesses. ^[29]

These moves support the bank’s updated medium‑term ROE target, which has been raised to 17%+ for fiscal 2026, up from prior assumptions and above many global peers. ^[30]

AI and efficiency

RBC has also highlighted its investments in artificial intelligence, including automation of back‑office processes and enhanced client analytics. One recent report suggests RBC expects to unlock more than C$700 million in enterprise value from AI‑driven initiatives, bolstering margins and competitive positioning over time. ^[31]

Regulatory tailwinds from OSFI

Canada’s banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), is in the midst of modernizing capital rules. Two developments matter for RBC: ^[32]

The Capital Adequacy Requirements Guideline (2026) comes into force around November 1, 2025 / January 1, 2026, updating the way capital requirements are calculated.
OSFI has signaled plans to ease capital treatment for certain commercial and real‑estate loans, potentially freeing up as much as C$1 trillion in additional lending capacity across the big banks.

At the same time, OSFI is keeping the Domestic Stability Buffer at 3.5%, ensuring the large banks — including RBC — maintain robust capital cushions even as they are encouraged to take “smart risks” and expand business lending. For RY shareholders, that combination points to regulated but still attractive loan growth potential rather than aggressive, high‑risk expansion.

Key Risks: Credit Quality, Housing and ESG Scrutiny

Despite the upbeat earnings and guidance, investors in RY stock need to stay mindful of several risks.

Credit and macro risk

RBC’s higher provisions this quarter reflect a more cautious credit environment. Management and external analysts point to: ^[33]

Rising unemployment in Canada and abroad
Ongoing pressure in the housing market, particularly for heavily indebted households facing mortgage renewals
The possibility that credit losses could rise from currently “manageable” levels if economic conditions deteriorate

While RBC’s strong capital ratios (CET1 in the mid‑teens) and liquidity coverage ratio around 127% provide a buffer, a sharper‑than‑expected downturn could still weigh on earnings and justify the relatively conservative analyst price targets. ^[34]

Valuation risk

With the stock now trading above both its long‑term average P/E and its recent P/E range, one valuation study notes that RY’s multiple has risen roughly 12–13% above its 12‑month average, reflecting investors’ stronger growth expectations. ^[35]

If earnings growth slows or credit costs rise more than expected, there is a risk that RY’s valuation could re‑rate lower, even if absolute earnings remain healthy.

ESG and reputational risk

On the ESG front, Royal Bank of Canada has drawn criticism after abandoning certain public sustainable finance targets due to changes in Canada’s Competition Act, which tighten requirements for environmental claims. RBC indicated it would no longer publicly report some sustainable finance metrics, even as it continues to track them internally and pursue a more “action‑oriented” climate strategy. ^[36]

The move has raised questions among some investors about transparency and long‑term climate risk management, adding a non‑financial dimension to the investment case for RY.

So Is RY Stock on the TSX a Buy, Hold, or Take‑Profits Candidate?

For income‑oriented and long‑term investors, the story today looks something like this:

Fundamentals: Record earnings, high‑teens ROE targets, and leading positions in Canadian retail banking, capital markets, and wealth management. ^[37]
Income: A newly raised dividend now at C$1.64 per quarter, with a long history of steady growth and a current yield of roughly 3% at today’s price. ^[38]
Valuation: RY trades at a premium to its historical average and at the high end of the Canadian bank group on P/E and P/B metrics, suggesting limited margin of safety at current levels. ^[39]
Analyst view: Ratings are mostly Buy/Outperform, but many 12‑month targets cluster not far above — and in some cases below — today’s price, implying modest expected upside rather than another year of 25–30% gains. ^[40]

In plain terms, RY on the TSX now behaves more like a high‑quality “compounder” than a deep value opportunity:

Existing shareholders may be content to hold, collect a growing dividend, and let earnings and book value compound over time.
New investors considering RY today may find that the risk‑reward is more balanced, with potential upside tied to continued execution on HSBC integration, AI‑driven efficiencies and OSFI‑enabled business lending — and downside mostly coming from credit and macro surprises or a valuation pullback.

As always, whether RY is right for a particular portfolio will depend on individual risk tolerance, time horizon and diversification needs. This article provides news and analysis, not personalized investment advice.