Toronto, May 21, 2026, 3:19 PM EDT
- Royal Bank of Canada shares climbed in Toronto afternoon trading, beating the S&P/TSX Composite.
- Investors are setting up for RBC’s May 28 results. Visible Alpha estimates call for a profit increase, but margin pressure is also in the forecast.
- Analysts aren’t in agreement. BofA raised its price target, but Raymond James went to a neutral rating.
Royal Bank of Canada shares gained Thursday, pushing higher ahead of quarterly earnings due next week. The results will show if Canada’s biggest lender can keep up its profit growth after the stock’s recent jump.
RBC was last at C$261.09 in Toronto, up 1.46%. The S&P/TSX Composite gained 0.89%, market data showed. U.S. shares traded up 1.1% at $189.29 in afternoon New York.
Canadian bank stocks are a big support for the Toronto market right now. The TSX notched its biggest gain in almost three weeks on Wednesday, boosted by a 1.9% jump in financials and a run-up in major banks as investors wait for next week’s earnings. “It’s really a financials-driven day,” Allan Small, senior investment adviser at iA Private Wealth, said to Reuters. Reuters
RBC is due to report fiscal Q2 results on May 28, with numbers expected at 6:00 a.m. ET and the earnings call set for 8:30 a.m. ET. Thursday’s trading looks more like investors positioning ahead of earnings than reacting to any one release.
Visible Alpha numbers from S&P Global point to RBC net income jumping 19% year over year to C$5.4 billion, with revenue set to climb almost 10%. Analysts see net interest margin inching up to 1.56%. Provisions for credit losses are expected to fall from last quarter.
RBC stock is up over 8% in the last four weeks and almost 49% in the past year, according to Trading Economics. The bar for a beat is high. Gains from here may need more than just steady loan growth or falling credit costs to move the shares.
BofA analyst Ebrahim Poonawala bumped his price target on RBC to C$273 from C$271 while sticking with his Buy rating, TheFly said, as reported by TipRanks.
Raymond James took the opposite direction with its rating. Analyst Stephen Boland cut RBC to Market Perform from Outperform ahead of the Big Six banks’ earnings. He did bump up his price target to C$265.50 from C$248. Boland called RBC “a scaled, diversified franchise” and pointed to its lower-volatility earnings, but said those strengths could hold back gains if other banks see stronger trading revenue. TipRanks
Banks are being weighed on different levers. S&P Global’s Visible Alpha breakdown has Toronto-Dominion Bank tracking for under 1% revenue growth, but net income could climb 8%. CIBC is forecast to boost revenue 11.6% and earnings 17.6%. If traders chase banks with bigger moves from trading or retail, RBC’s steadier lineup might lose some shine.
RBC started the quarter strong. In February, the bank posted first-quarter earnings of C$4.08 a share, topping the analyst consensus of C$3.85. Wealth-management earnings jumped 32%, according to Reuters. Josh Sheluk, portfolio manager at Verecan Capital Management, called Canadian banks’ results then “blockbuster,” and said they pointed to a solid footing in the North American economy. Reuters
Canada’s main stock index ticked up early Thursday, helped by energy stocks after oil prices climbed on fresh concerns about the Middle East, Reuters said. On Wednesday, falling oil prices drove long-term borrowing costs down, giving equities a boost, with financials seeing gains.
RBC’s shares have climbed for a year, but there’s a risk the stock already reflects most of the positive news. Investors are watching for any slip in margins, bigger credit provisions, or soft capital markets revenue. Defending RBC’s premium valuation could get tougher, especially now that at least one brokerage is no longer recommending the bank as an outperform.
Investors are trading RBC as a high-quality bank with high expectations ahead of next Thursday’s report. The results then will show if that’s enough.
