Royal Bank of Canada (RY) Outlook Strengthens in Canaccord Update

Royal Bank of Canada (NYSE:RY) is included among the 15 Global Dividend Stocks to Diversify Your Portfolio.

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On December 4, Canaccord raised its price target on Royal Bank of Canada (NYSE:RY) to C$236 from C$224 and kept a Buy rating on the shares.

Royal Bank of Canada delivered fourth-quarter earnings that topped analyst estimates. The lift came from capital markets, where activity picked up, and margins held firm. That performance pushed management to raise its return on equity outlook.

Royal Bank of Canada (NYSE:RY) now expects return on equity to exceed 17% in fiscal 2026. That compares with a prior forecast of 16% shared earlier this year. The bank also raised its quarterly dividend by 6%, reinforcing its focus on shareholder returns.

“It is a growth story, (it is) a capital return story through dividends,” CEO Dave McKay said. At the same time, McKay pointed to some caution. The Canadian economy has not fully normalized, and markets remain elevated. Trade talks between Canada and the US have yet to remove tariffs on sectors such as steel and aluminum. Across the sector, Canada’s largest banks have leaned into fee-based, higher-margin businesses as loan growth in personal and commercial banking slows. Economic uncertainty has made borrowers more cautious, and that shows up in lending volumes.

Banks are also watching federal spending plans closely. Increased defense outlays and large infrastructure projects, from pipelines to airports, could support domestic growth. That matters at a time when housing activity remains soft, and unemployment is still elevated. McKay said RBC, supported by a strong capital position, will prioritize organic growth and steady shareholder returns. The bank remains patient on US expansion, waiting for the right moment to pursue M&A or other opportunities in what remains a key long-term market.

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