Royal Bank of Canada (RY) Shares Soar 0.27% on Strong Earnings

Royal Bank of Canada (RY) shares rose to their highest level since December 2024 today, with an intraday gain of 0.27%.

Over the past five years, the strategy of buying RY shares after they reached a recent high and holding for one week yielded strong results. The strategy achieved an overall return of 104.86%, surpassing the benchmark return of 88.25% by 16.61%. Although the strategy had a maximum drawdown of -16.60% and a Sharpe ratio of 1.11, indicating some risk and moderate returns, the compound annual growth rate (CAGR) was 15.50%, reflecting the strategy's ability to generate consistent returns.

On May 20, 2025, Royal Bank of Canada (RY) received an "Outperform" rating from analyst Paul Holden of CIBC. This rating was accompanied by an increase in the price target for RY from C$168 to C$174, indicating strong confidence in the bank's future performance. This positive outlook is supported by the bank's recent first-quarter earnings, which showed record results. Adjusted earnings for the quarter reached $5.3 billion, marking a 29% year-over-year increase. The return on equity stood at 16.8%, reflecting the bank's strong financial health. Net interest income saw a significant rise of 26%, driven by robust deposit and loan growth, as well as the strategic acquisition of HSBC Canada, which contributed substantially to the earnings. Despite an increase in provisions for credit losses due to economic cycles and specific sector challenges, the bank's overall performance remains robust. The bank's capital strength is solid, and wealth management revenues have surpassed $5.5 billion, further bolstering its financial position.