Opinions Paul Harris, CFA
Royal BankRY.TOBUYApr 22, 2025
Paul Harris, CFAStock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Today he's taking money off the table in the sector. Why? Valuation. Trading today at 2.6-2.7x forward book value, yet the business hasn't really changed all that much. In on the SpaceX IPO, which is like money from heaven.
Martin Cobb, ASIPShe's been wrong about the Canadian banks the past year, that they're expensive. They were up 30% last year + 20% this year. These stocks are priced for perfection and trading well above historical averages in PE. Wait. Last year, they released provisions for loan losses into earnings, which was a temporary boost. Their only growth aspect this year is how many branches a bank can close, which is a weak growth driver. She hasn't bought any banks this year.
He's a big fan of EQB. Phenomenal CEO, who'll take company to new heights. Will most likely outperform in next 3-5 years. Organic growth will be higher. A more agile and flexible organization. Digitally native, so it's built to adapt. Very conservative provisioning.
You buy RY for stability, its huge infrastructure, and capital markets business. Sufficient provisions for consumer credit issues. Very solid hold for the longer term.
Both are a Buy in his books.
Premium contentWe reiterate as a TOP PICK RY, one of five Canadian banks who have partnered to create the Defense, Security, and Resilience Bank (DSRB) designed to provide funding to the Government of Canada's commitment to boost military spending. Recent reported quarterly earnings showed a 12% increase in net income along with growing cash reserves as the bank bought back shares and retired debt. It trades at 17x earnings, 2.6x book and supports a 16% ROE. We recommend maintaining the stop at $220, looking to achieve $284 -- upside potential of 18%. Yield 2.6%
(Analysts’ price target is $245.07)
His favourite, the 800-pound gorilla. The biggest, the baddest, and it dominates.
Brendan Caldwell
With Iran conflict, yield curve has gone a bit flat, so net interest margins aren't going to be as good. If the conflict persists, earnings will possibly decelerate. This name is best positioned for all that. Usually trades at 11% premium to peers, now 8%.
If you assume that the conflict gears down to more manageable levels, you could buy the banks here and this name is the best choice.
Has done well, but pulled back a little, which makes it an opportunity. Is the largest Canadian bank, very diversified with strong wealth management, so somewhere defensive. Pays a 3% dividend, not the highest, but still good. They bought HSBC a few years ago. It trades at a premium to the group, but boasts a higher ROE.
(Analysts’ price target is $252.33)
Christine Poole
Revenues went up last quarter, but so did costs. Needs better loan growth to hit ROE targets. Shines in asset management and capital markets. As market stabilizes, lots of opportunity in IPOs and M&A.
Paul Harris, CFA
Both have a very large domestic presence, which helps them in this environment. Both had very good numbers last quarter and are very good businesses. As expected, all banks increased credit provisions.
RY will benefit more from its large capital markets business. Volatility helps capital markets a lot; perhaps you won't get the M&A, but a lot of trading goes on with equity, debt, and other derivatives. It's global. Expectation in US of deregulation in financial services; if so, RY will benefit a lot more than NA.
NA is smaller and more focused in Quebec, though the CWB acquisition is changing that.