RBC Well Positioned to Deal with Current Downturn

After updating our models for these results, we are increasing our fair value estimate

Eric Compton 27 May, 2020 | 1:58PM

Royal Bank Building

Wide-moat Royal Bank of Canada (RY) reported decent fiscal second-quarter results, all things considered. The economic strain of COVID-19-related shutdowns weighed on results with provisioning up significantly, coming in at $2.8 billion versus a more normal range of $300 million-$500 million. This was the biggest factor driving the year-over-year decline in EPS of 55% to $1.00. So far, Canadian banks have reported year-over-year EPS drops of 39% to 55%--on the worse end of the spectrum.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Royal Bank of Canada92.80 CAD1.68

About Author

Eric Compton

Eric Compton  Eric Compton is an equity analyst for Morningstar,

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