Erste Group upgrades Royal Bank of Canada stock rating to Buy from Hold

Investing.com - Erste Group upgraded Royal Bank of Canada (NYSE:RY) stock rating from Hold to Buy on Monday. The banking giant, with a market capitalization of $207 billion, has demonstrated remarkable dividend reliability, maintaining payments for 53 consecutive years.

The research firm cited Royal Bank of Canada’s higher return on equity of 14.4% compared to the sector average of 11.8% as a key factor in the upgrade decision.

Erste Group also noted that the bank’s cost-income ratio is lower than industry peers, which it described as "very positive" for the company’s outlook.

The firm expects Royal Bank of Canada’s profits to continue rising in the coming quarters, supporting the more optimistic rating.

According to Erste Group, Royal Bank of Canada stock is "attractively valued" with a price-to-earnings ratio of 14.4x for 2025 estimates, particularly when considering the quality of the company.

In other recent news, Royal Bank of Canada has reported impressive financial results for the third quarter of 2025, surpassing analysts’ expectations. The bank achieved an adjusted diluted earnings per share of $3.84, beating the consensus estimate of $3.32. Revenue figures also exceeded forecasts, reaching $16.99 billion compared to the anticipated $16.02 billion. Following these strong results, BMO Capital raised its price target for Royal Bank of Canada to C$203, maintaining an Outperform rating.

In a separate development, S&P Global Ratings revised its outlook on Royal Bank of Canada Insurance Co. Ltd. from stable to negative. This change is due to concerns over the company’s reduced product diversification, which now focuses primarily on creditor and longevity reinsurance. Despite this outlook revision, S&P affirmed the company’s ’AA-’ long-term issuer credit and financial strength ratings. These recent developments provide a comprehensive look at the current state of Royal Bank of Canada.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.