TD Newcrest Cuts Price Target on Royal Bank of Canada (RY), Potential But Not Much
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Price: $205.21 -1.16%
Rating Summary:
10 Buy, 6 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
10 Buy, 6 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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TD Newcrest is reiterating its Buy rating on shares of Royal Bank of Canada (NYSE: RY) and is lowering its price target from C$66 to C$62 following the release of its third quarter results.
The company reported earnings of $1.06 per share for the third quarter, well behind the firm's estimate of $1.16 and the consensus of $1.08.
The firm believes that the company will continue to struggle to report strong earnings as the immediate outlook remains challenging. Although cost initiatives in P&C Banking may offer some additional leverage, TD believes that the segment could ultimately perform stronger and Royal is not among their top picks in the space.
An analyst at TD comments, "We sense that management may get serious with its cost containment initiatives in the Domestic P&C business. It is not obvious to us that the segment necessarily has a lot of fat to trim given where peers operate, but moving to a “low 40s” Non Interest Expense ratio could offer some material upside to the outlook."
TD cut its 2011 and 2012 EPS estimates from $4.56 and $5.25 to $4.38 and $4.85. The firm also lowered its 2013 estimate from $8.40 to $5.35.
For more ratings news on Royal Bank of Canada click here and for the rating history of Royal Bank of Canada click here.
Shares of Royal Bank of Canada closed at $49.89 yesterday.
The company reported earnings of $1.06 per share for the third quarter, well behind the firm's estimate of $1.16 and the consensus of $1.08.
The firm believes that the company will continue to struggle to report strong earnings as the immediate outlook remains challenging. Although cost initiatives in P&C Banking may offer some additional leverage, TD believes that the segment could ultimately perform stronger and Royal is not among their top picks in the space.
An analyst at TD comments, "We sense that management may get serious with its cost containment initiatives in the Domestic P&C business. It is not obvious to us that the segment necessarily has a lot of fat to trim given where peers operate, but moving to a “low 40s” Non Interest Expense ratio could offer some material upside to the outlook."
TD cut its 2011 and 2012 EPS estimates from $4.56 and $5.25 to $4.38 and $4.85. The firm also lowered its 2013 estimate from $8.40 to $5.35.
For more ratings news on Royal Bank of Canada click here and for the rating history of Royal Bank of Canada click here.
Shares of Royal Bank of Canada closed at $49.89 yesterday.
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