TLDR
- RY hit a new 52-week high of $211.39 on Monday, last trading at $211.73
- Quarterly EPS came in at $2.84, beating consensus of $2.81
- Quarterly dividend raised to $1.76 from $1.64, yielding ~3.3% annualized
- RBC raised $2.3 billion in Senior Global Medium-Term Notes on July 10
- Analyst consensus sits at “Moderate Buy” with an average price target of $225
Royal Bank of Canada (RY) touched a new 52-week high on Monday, reaching $211.39 before settling at $211.73, up around 0.4% on the day. The previous close was $211.09.
The stock has been on a solid run. Its 50-day moving average sits at $194.71, and its 200-day moving average is at $177.97, both well below the current price.
RBC’s market cap stands at approximately $294.62 billion, with a P/E ratio of 19.07 and a beta of 0.80.
In its most recent quarterly earnings, reported May 28, RBC posted EPS of $2.84, edging past the $2.81 consensus estimate. Revenue came in at $12.84 billion, ahead of the $12.74 billion forecast and up 11.4% year over year.
Return on equity was 17.68%, with a net margin of 15.92%. Analysts currently expect full-year EPS of $11.45.
Dividend Gets a Bump
RBC also raised its quarterly dividend from $1.64 to $1.76 per share. The next payment is scheduled for August 24, with a record date of July 27. That puts the annualized yield at roughly 3.3%, with a payout ratio of 44.47%.
The dividend hike signals management confidence in the bank’s earnings trajectory.
$2.3 Billion Debt Issuance
On July 10, RBC raised $2.3 billion through a new tranche of Senior Global Medium-Term Notes under its U.S. shelf registration. The offering included $1.0 billion in 4.652% fixed/floating notes due 2029, $300 million in floating rate notes due 2029, and $1.0 billion in 4.950% fixed/floating notes due 2032.
The issuance falls under RBC’s existing $75 billion debt program and was backed by legal opinions from Sullivan & Cromwell LLP and Norton Rose Fulbright Canada LLP.
Institutional investors have been adding exposure. AQR Capital Management increased its stake by 60.9% in Q1, while Baird Financial Group lifted its position by 39.1% in Q2. Sivia Capital Partners added 57.7% in Q2. Overall, institutional investors hold 45.31% of the stock.
On the analyst front, 10 out of 14 rated analysts have a Buy on RY, with 4 at Hold.
The consensus price target is $225, which implies roughly 6% upside from current levels. Argus set that $225 target in June, while Raymond James cut its rating to Market Perform in May.
TD Securities reaffirmed its Buy rating on May 29. Weiss Ratings nudged its grade slightly lower in late June but kept it in Buy territory.
The most recent analyst price target on the TSX-listed stock is C$305.00, also a Buy.
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