Key statistics

Is RY a good stock to buy in 2026?

For investors considering RY stock in 2026, Royal Bank of Canada presents a complex picture. Its P/E ratio of 16.25x is notably below the sector average of 20x, suggesting it might be undervalued, an assessment supported by a DCF fair value of $226.76, indicating a 26.3% upside. However, the analyst consensus target is $124.85, representing a -30.5% downside from current levels, despite 41.4% of analysts rating it a ‘Buy’. This mixed outlook requires careful consideration for anyone asking “is RY a good stock” for their portfolio.

2026 RY price scenarios

Based on analyst consensus of $124.85 from 29 analysts. Not a prediction by Alert Invest.

About Royal Bank of Canada (RY)

Royal Bank of Canada operates as a diversified financial service company worldwide. The company’s Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network.

Led by CEO David I. McKay, Royal Bank of Canada is a behemoth in the financial services sector, boasting 94,624 dedicated employees globally. The bank’s distinctive strengths lie in its diversified business model, spanning personal and commercial banking, wealth management, insurance, investor & treasury services, and capital markets, providing a broad revenue base and resilience against sector-specific downturns. The company’s vast operational scale across Canada, the U.S., and other international markets also underpins its strong competitive standing.

RY competitive moat and business analysis

Royal Bank of Canada (RY) benefits from a robust competitive moat, primarily driven by its vast scale, strong brand reputation, and diversified revenue streams across various financial services. Its impressive net margin of 20.88% highlights efficient operations, which is crucial in the highly competitive banking sector. While ROE and ROIC data were not available, the strong net margin suggests effective capital deployment and solid underlying profitability.

RY’s operations are geographically diversified, with significant presence beyond its Canadian home market. The available data points to geographic segment information for fiscal year 2025, specifically as of 2025-10-31, though specific regional revenue breakdowns are not provided. This broad geographic footprint, coupled with its range of services, minimizes reliance on any single market or product, providing stability to its earnings.

The moat trend for RY stock appears stable, supported by a modest but positive revenue growth of 2.1% year-over-year. While there was no specific transcript quote provided to indicate forward-looking strategic moves, the bank’s consistent performance and strategic acquisitions in the wealth management space suggest a continued focus on expanding its high-margin businesses. This deliberate growth strategy helps reinforce its competitive position in the long term.

When comparing RY stock to its peers, Royal Bank of Canada stands out with its consistent profitability and strong balance sheet, even with a relatively high debt-to-equity ratio of 2.59x, which is common for banks due to their leverage model. Investors can perform a detailed side-by-side analysis by comparing RY vs BAC, RY vs C, and RY vs GS to better understand its relative strengths and weaknesses within the diversified banking industry. Each of these peers brings distinct operational characteristics, making a comprehensive comparison essential for a holistic RY valuation.

Royal Bank of Canada analyst rating

Based on 29 analysts. 41.4% rate RY Buy or Strong Buy.

A 41.4% “Buy” rating for RY stock from a pool of 29 analysts is a reasonably strong signal, indicating a significant portion of the analyst community sees upside potential. While not an overwhelming majority, it suggests positive sentiment for Royal Bank of Canada in the context of the broader Financial Services sector.

Is RY undervalued or overvalued?

When assessing RY valuation, we see a mixed but generally favorable picture. Royal Bank of Canada’s P/E ratio of 16.25x is significantly lower than the Financial Services sector average of 20x, suggesting the stock may be undervalued relative to its industry peers on an earnings multiple basis. This lower multiple could make RY stock an an attractive option for value-oriented investors.

Furthermore, our discounted cash flow (DCF) analysis indicates a fair value of $226.76 for RY stock, implying a substantial 26.3% upside from its current price. This strong intrinsic value signal, alongside the favorable P/E comparison, leans towards an undervalued position for Royal Bank of Canada, despite the analyst consensus target indicating a downside. The P/B ratio of 2.44x and P/S ratio of 3.39x also suggest a fair to reasonable valuation within the diversified banking space.

RY financial health & key metrics

For value investors, RY stock’s financial health presents a compelling case. Its P/E ratio being below the sector average, combined with a robust net margin of 20.88% and a strong FCF yield of 8.32%, indicates a profitable and cash-generative business that may be trading at an attractive RY valuation. While the debt-to-equity ratio of 2.59x is relatively high, this is characteristic of the banking industry and should be evaluated in context. The revenue growth of 2.1% suggests stability, and the DCF analysis pointing to a significant undervaluation further enhances the appeal of Royal Bank of Canada for long-term investors.

Royal Bank of Canada earnings history & next report

Royal Bank of Canada reported EPS of $2.94, beating estimates by 4.63%. Next earnings: 2026-05-28 with EPS estimate of $2.8.

Investors will be keenly watching the next earnings report for RY stock, scheduled for May 28, 2026. With an estimated EPS of $2.8, the market will be looking for continued growth and signs that Royal Bank of Canada can sustain its positive momentum, especially following its previous beat. Key areas to watch will include net interest income, loan growth, and any forward guidance on economic outlook and credit quality, all of which will influence future RY valuation.

RY daily short volume

Short volume data from FINRA CNMS Consolidated — shares sold short in the most recent US trading session. A high short ratio can signal bearish conviction or a potential short squeeze. Updated every trading day.

Recent RY analyst rating changes

Royal Bank of Canada stock news today

How does RY compare to its peers?

Understanding the competitive landscape is crucial for a complete RY valuation. Royal Bank of Canada operates in a dynamic financial services environment, competing with other major diversified banks. Here’s how RY stacks up against some of its key peers, offering investors additional perspectives on whether “is RY a good stock” in its industry.

FAQ — Royal Bank of Canada (RY) stock