Canadian bank stocks are bringing out their earnings reports, and the news is excellent for Royal Bank of Canada (TSE:RY) (NYSE:RY). It’s up fractionally in Wednesday afternoon’s trading after the latest earnings report offered some bright spots in an otherwise bleak landscape. Royal Bank reported earnings of C$2.85 per share, which was ahead of the C$2.80 that analysts were expecting. That wasn’t the only win, however, as Royal Bank saw interest income rise by 2.1%.
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It’s also responding to the larger economic difficulties out there by putting more cash behind its provisions for credit losses. Now, Royal Bank has C$813 million to backstop its loans against potential losses, which is up 53% against this time last year.
Furthermore, Royal Bank announced a quarterly dividend payment of $1.38 per share, payable on May 24 to shareholders of record on April 25.
Issues with City National
Royal Bank is facing some issues from its connection to City National, a regional bank that’s been running into issues and forcing Royal Bank to pump more capital into its operations. City National lost around 100 jobs and made some other management changes, but Royal Bank still considers it a “top priority.”
Is RY a Buy, Sell, or Hold Today?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RY stock based on five Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 3.02% rally in its share price over the past year, the average RY price target of C$142.79 per share implies 7.99% upside potential.
