AlphaMadera's AlphaVal page classifies Royal Bank of Canada as a Banks, Insurers & Asset Managers business and values it using P/Tangible Book × ROE Quality, then compares the result to the current market price to flag RY as undervalued, fairly valued, or overvalued.

What is Royal Bank of Canada's fair value?

Fair value for RY comes from a P/Tangible Book × ROE Quality model -- the approach AlphaVal selected for this company's Banks, Insurers & Asset Managers classification. The live AlphaVal page shows bear, base, and bull scenarios alongside the key assumption behind each.

How does AlphaMadera value RY?

AlphaVal routes each company to one of ten valuation archetypes based on its business model. RY was classified as Banks, Insurers & Asset Managers and is valued using P/Tangible Book × ROE Quality, built from RY's most recent reported fundamentals.

RY - Royal Bank of Canada

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $225.00 DETAILS

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 90% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Moderate

Trading 27.9% above fair value

Current Price $196.30

Bear Case $104.27 46.9% downside ($104.27 - $196.30) / $196.30 = -46.9% ROTCE 13.6% → 1.82x TBV

Fair Value $153.51 21.8% downside ($153.51 - $196.30) / $196.30 = -21.8% ROTCE 18.1% → 2.68x TBV

Bull Case $183.05 6.7% downside ($183.05 - $196.30) / $196.30 = -6.7% ROTCE 20.9% → 3.19x TBV

Adjust Assumptions

Return on Tangible Equity

18.1%

Cost of Equity

9.3%

Key Value Driver

ROTCE (18.1%) vs. cost of equity (9.3%)

Terminal Value % of EV

Implied Market Multiple 3.42x

Market is pricing in (growth)

Plain-Language Summary

With ROTCE of 18.1% vs. 9.3% cost of equity, fair P/TBV is 2.68x on $57.38 tangible book, implying $153.51 per share. DDM cross-check: $118.98.

Analyst Consensus (External Reference)

Never blended into the bear/base/bull estimates above -- shown only as an outside comparison.

Average Target (30 analysts) $225.00

Analyst Range $225.00 – $225.00

Divergence from AlphaVal 32%

Warnings

⚠ Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.

⚠ Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.

ℹ Wall Street's average price target is $225.00 (from 30 analysts). Our estimate is 32% below the consensus -- consider that gap carefully.

ℹ Financial statements were converted from CAD into USD using USDCAD at 0.7102 USD per CAD.

Key Risks

Book value quality matters as much as level — check loan loss reserves
Interest rate sensitivity creates non-linear earnings surprises
Insurance reserving is actuarial, not financial — errors emerge slowly