Value
5.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.9 |
| P/S | 7.4 |
| Fwd P/E | 7.6 |
| PEG | 4.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 16.3x
- ▸PEG: 2.53
RY · Why this verdict
Why Royal Bank Of Canada (RY) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Royal Bank of Canada has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 8.5%, leads its diversified banking peer group in revenue growth, and carries strong net margins of 34%, but the stock has already exceeded analyst consensus targets and sits at overbought levels with falling on-balance volume.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The bank has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 8.5%, including a 16.8% beat in August 2025, while maintaining net margins of 34%, which are peer-leading for diversified banking. Earnings | Earnings per share continues to exceed analyst estimates in at least 3 of the next 4 quarters and net margins remain above 28% over the next 12 months. | →Stable |
| CounterEarnings estimates for Canadian banks are trending down according to the data, suggesting the forward earnings trajectory may be weaker than recent beats imply, and banking earnings can be highly sensitive to credit loss provisions that are difficult to predict. | ||
The bank ranks as an industry growth leader with revenue growth placing it in the top category among diversified banking peers, supported by broad geographic diversification and strong capital markets and wealth management franchises. Peer-rank breakdown | Revenue growth remains above 5% year over year over the next 12 months, sustaining the industry growth leader ranking. | →Stable |
| CounterAnalyst earnings estimates are described as trending downward, which conflicts with the peer-leading growth positioning and may reflect deteriorating macro conditions in Canada or reduced capital markets activity that is not yet visible in trailing metrics. | ||
The current price of $199.07 has exceeded the analyst consensus target of $197.71, and the RSI is at 77, indicating overbought conditions, while on-balance volume is falling, suggesting distribution is underway at these elevated levels. Momentum breakdown | Price corrects to below $185, providing a better entry point at least 7% below the current price that restores a positive risk/reward ratio. | →Stable |
| CounterA stock trading above analyst targets with an overbought RSI can continue higher if the earnings beat pattern surprises analysts sufficiently to trigger upward consensus target revisions, particularly in a bank with strong growth and margin leadership. | ||
News sentiment of plus 0.40 based on recent coverage provides a modest positive signal, and the stock qualifies for a news-driven upgrade consideration, reflecting constructive market narrative around the bank's execution. Sentiment breakdown | Positive news sentiment score remains above 0.0 over the next 6 months, with no material negative credit or regulatory news emerging. | →Stable |
| CounterThe positive news sentiment is based on a single article as indicated by the n=1 qualifier, making it a weak signal that should not carry meaningful weight against the stronger negative signals of overbought price, falling on-balance volume, and downward-trending analyst estimates. | ||
The bank has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 8.5%, including a 16.8% beat in August 2025, while maintaining net margins of 34%, which are peer-leading for diversified banking.
→StableEarnings
- Expectation
- Earnings per share continues to exceed analyst estimates in at least 3 of the next 4 quarters and net margins remain above 28% over the next 12 months.
CounterEarnings estimates for Canadian banks are trending down according to the data, suggesting the forward earnings trajectory may be weaker than recent beats imply, and banking earnings can be highly sensitive to credit loss provisions that are difficult to predict.
The bank ranks as an industry growth leader with revenue growth placing it in the top category among diversified banking peers, supported by broad geographic diversification and strong capital markets and wealth management franchises.
→StablePeer-rank breakdown
- Expectation
- Revenue growth remains above 5% year over year over the next 12 months, sustaining the industry growth leader ranking.
CounterAnalyst earnings estimates are described as trending downward, which conflicts with the peer-leading growth positioning and may reflect deteriorating macro conditions in Canada or reduced capital markets activity that is not yet visible in trailing metrics.
The current price of $199.07 has exceeded the analyst consensus target of $197.71, and the RSI is at 77, indicating overbought conditions, while on-balance volume is falling, suggesting distribution is underway at these elevated levels.
→StableMomentum breakdown
- Expectation
- Price corrects to below $185, providing a better entry point at least 7% below the current price that restores a positive risk/reward ratio.
CounterA stock trading above analyst targets with an overbought RSI can continue higher if the earnings beat pattern surprises analysts sufficiently to trigger upward consensus target revisions, particularly in a bank with strong growth and margin leadership.
News sentiment of plus 0.40 based on recent coverage provides a modest positive signal, and the stock qualifies for a news-driven upgrade consideration, reflecting constructive market narrative around the bank's execution.
→StableSentiment breakdown
- Expectation
- Positive news sentiment score remains above 0.0 over the next 6 months, with no material negative credit or regulatory news emerging.
CounterThe positive news sentiment is based on a single article as indicated by the n=1 qualifier, making it a weak signal that should not carry meaningful weight against the stronger negative signals of overbought price, falling on-balance volume, and downward-trending analyst estimates.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.4 |
| ROA | 0.6 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 5.9 |
| Piotroski F | 4.4 |
- ▸Strong margins: 34%
Growth
7.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 7.5 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 6.9 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 4.1 |
- ▸Overbought (RSI 83)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 4.1 |
| erm sentiment | 4.2 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 6.8 |
| growth rank | 9.4 |
- ▸Industry growth leader
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.2 |
| support resistance | 0.8 |
| 52w position | 9.9 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 5.0 |
| volatility | 9.1 |
| put call | 4.4 |
| implied vol | 7.9 |
| max pain risk | 3.0 |
| beta | 7.4 |
- ▸Above max pain $95
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.8 |
| dividend safety | 4.8 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:63d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-2.57
Upside
-20.0%
Downside
7.8%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.8>=5.5. Top dim: Growth at 7.0; weakest: Technical at 4.3. No conviction either direction.
The strongest dimensions are Growth at 7.0, Momentum at 6.8, and Risk (lower is worse) at 6.1; the weakest are Technical at 4.3, Insider at 5.0, and Sentiment at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -2.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The bank has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 8.5%, including a 16.8% beat in August 2025, while maintaining net margins of 34%, which are peer-leading for diversified banking.
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, breaking the 4-quarter consecutive beat streak.
- P2The bank ranks as an industry growth leader with revenue growth placing it in the top category among diversified banking peers, supported by broad geographic diversification and strong capital markets and wealth management franchises.
Trip ifRevenue growth rate falls below 3% year over year for at least 2 consecutive quarters, indicating a loss of the peer-leading growth premium.
- P3The current price of $199.07 has exceeded the analyst consensus target of $197.71, and the RSI is at 77, indicating overbought conditions, while on-balance volume is falling, suggesting distribution is underway at these elevated levels.
Trip ifPrice rises above $210, more than 5% above the current $199.07, further extending the overbought condition beyond analyst targets without a supporting upward revision in consensus estimates.
- P4News sentiment of plus 0.40 based on recent coverage provides a modest positive signal, and the stock qualifies for a news-driven upgrade consideration, reflecting constructive market narrative around the bank's execution.
Trip ifA material credit loss provision announcement increases loan loss reserves by more than 20% above the prior quarter level, signaling deteriorating credit quality in the Canadian lending portfolio.