Royal Bank of Canada (RY) Expected to Beat Earnings Estimates, but Can the Stock Move Higher?

Royal Bank (RY) is expected to report Q2 2025 earnings of $2.36 per share, a YoY decline of -0.8%, with revenues of $11.59 billion, an increase of 8.5% YoY. The consensus EPS estimate has been revised 0.85% higher over the last 30 days. The Zacks Earnings ESP suggests a positive surprise, with a positive Earnings ESP reading being a strong predictor of an earnings beat. A positive surprise could lead to a higher stock price.

Royal Bank of Canada (RY) is set to report its Q2 2025 earnings on July 2, 2025. Analysts expect the bank to report an earnings per share (EPS) of $2.36, a year-over-year (YoY) decline of -0.8%. Revenue is projected to reach $11.59 billion, marking an 8.5% YoY increase. The consensus EPS estimate has been revised 0.85% higher over the last 30 days, suggesting a growing optimism among analysts [1].

The Zacks Earnings ESP (Earnings Surprise Prediction) indicates a positive surprise, with a positive reading being a strong predictor of an earnings beat. This could potentially lead to a higher stock price, assuming the actual results exceed expectations [1].

In addition to its earnings report, RBC has been making significant moves in the cryptocurrency space. The bank has expanded its exposure to Bitcoin through a 16% increase in shares of Strategy Inc. (MSTR), a software-turned-Bitcoin-treasury company. RBC now holds 188,657 MSTR shares worth over $76 million, up from 162,909 shares in Q1 2025 [2].

Strategy Inc. has also been aggressively accumulating Bitcoin. On August 18, 2025, the company disclosed the purchase of 430 BTC for $51.4 million, bringing its total holdings to 629,376 BTC. This acquisition, funded through the sale of various preferred stock classes, has resulted in an unrealized profit of over $26 billion, cementing Strategy as the largest corporate holder of Bitcoin [2].

Meanwhile, RBC is exploring the potential sale of its joint payments venture, Moneris. Valued at approximately $2 billion, Moneris handles one in every three business transactions nationwide and has annual revenue of nearly $700 million. The banks are in the early stages of exploring this potential sale, with investment banking firms advising on the transaction [3].

The sale of Moneris underscores the evolving dynamics of the payments sector in North America. For investors, the transaction offers a lens through which to assess the strategic calculus of banks, the appetite of private equity and fintech players, and the long-term value of recurring revenue models in a rapidly consolidating market [3].

Overall, while RBC's Q2 2025 earnings are expected to show a YoY decline in EPS, the bank's strategic moves in cryptocurrency and payments processing indicate a proactive approach to leveraging new opportunities in the financial landscape.

References:
[1] https://www.coinspeaker.com/royal-bank-of-canada-has-raised-mstr-holdings-by-16/
[2] https://www.ainvest.com/news/royal-bank-canada-bank-montreal-explore-2-billion-sale-canadian-payments-venture-moneris-2508/
[3] https://www.marketbeat.com/stocks/TSE/RY/earnings/