RBC Reveals 3 Important Trends for Small Businesses

Royal Bank of Canada (RY), the second-largest bank in Canada, announced Monday the results of its latest survey of Canadians.

This survey reveals that trends and expectations that emerged during the pandemic are expected to hold for the long term. Three important trends will influence the direction of small businesses over the next year: the growing demand for digital experiences, health protocols and measures promoting well-being, and a new appetite for local and socially responsible consumption.

“There’s no doubt that the pandemic created some significant challenges and changes for small business owners. But it also became a catalyst to accelerate some important shifts that we started seeing pre-pandemic around digital adoption, a focus on wellness, and support for diverse businesses and community members,” said Don Ludlow, vice-president of Small Business, Partnerships & Strategy, RBC.

“These have become the new expectations of consumers for today’s small businesses. Successful entrepreneurs will be those who adapt their business strategies and operational practices to address these new consumer and employee demands.”

Of those who have started a business, or know someone who has, the majority said the pandemic has created interesting new opportunities (75%).

Many business owners say they started their business out of a desire to redefine their priorities or purpose (76%), or a need to replace lost income (71%). The crippling economy also gave entrepreneurs the time and motivation to formalize their business (74%), either by officially registering their activities, or opening a business account.

The RBC Small Business Poll was conducted by Ipsos Canada from July 30 to August 4, 2021. Over 2,000 Canadian adults representing six different regions (British Columbia, Alberta, Saskatchewan/Manitoba, Ontario, Quebec, and the provinces of Atlantic) responded to the online survey. (See Royal Bank of Canada stock charts on TipRanks)

On September 1, Credit Suisse analyst Mike Rizvanovic kept a Buy rating on RY, with a C$144 price target. This implies 12.3% upside potential.

The rest of the Street is bullish on RY with a Strong Buy consensus rating, based on seven Buys and two Holds. The average Royal Bank of Canada price target of C$144 implies 12.3% upside potential to current levels.

TipRanks’ Smart Score

RY scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.