Royal Bank of Canada (RY) Q3 Earnings Surpass Expectations, Analysts Predict Upside Potential.

Royal Bank of Canada (RY) reports Q3 EPS of $3.84, surpassing estimates, with revenue increasing 16.1% YoY to $16.99 billion. Analysts predict a potential stock price upside with a "Buy" recommendation on RY, with an average one-year price target of $143.52, indicating a 4.24% upside from the current trading price.

Royal Bank of Canada (RY) has reported strong financial results for the third quarter of 2025, exceeding analysts' expectations. The bank posted an adjusted diluted earnings per share (EPS) of $3.84, significantly outperforming the forecast of $3.32. Revenue also surpassed expectations, reaching $16.99 billion compared to the anticipated $16.02 billion, marking a robust year-over-year growth of 16.1% [1].

The bank's stock price rose by 6.36% to $146.43 in pre-market trading following the announcement. RBC offers an attractive dividend yield of 3.29% and has maintained dividend payments for 53 consecutive years. Key takeaways include a 15.66% beat in EPS and a 6.05% increase in revenue, with earnings exceeding forecasts by a significant margin [1].

RBC's performance was driven by a diversified business model that includes banking, wealth management, and capital markets. The bank's return on equity stood at 17.7% for the quarter, reflecting strong profitability. Additionally, the bank's capital generation, measured by the CET1 ratio, was 13.2%, indicating robust financial health [1].

Analysts are optimistic about the bank's prospects, with a "Buy" recommendation on RY and an average one-year price target of $143.52. This suggests a potential 4.24% upside from the current trading price, indicating investor confidence in the bank's financial health and growth prospects [1].

Looking ahead, RBC is targeting a return on equity of at least 16% in fiscal 2026, building on its current return on equity of 15%. The bank expects mid-teens growth in net interest income and mid to high single-digit expense growth. RBC remains focused on organic growth and potential strategic acquisitions, while closely monitoring trade negotiations and economic conditions [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-royal-bank-of-canada-beats-q3-2025-expectations-93CH-4212914