TD downgrades Royal Bank of Canada to Hold on valuation

TD Securities analyst Mario Mendonca last night downgraded Royal Bank of Canada (RY) to Hold from Buy with a price target of C$180, up from C$170. The downgrade is largely due to valuation and a view that investors will rotate into the underperforming banks, the analyst tells investors in a research note. The firm also sees greater potential for the underperforming banks with sub-par returns on equity to improve. It believes RBC”s “healthy” return on equity will be difficult to build on without healthy share buybacks, which it thinks are likely to be limited at current share levels.