Royal Bank of Canada: A Correction Opportunity Amid Q3 Strength
The recent earnings season for Canada's Big Six banks has been unusual, with some unexpected moves. However, Royal Bank of Canada (TSX:RY) has seen a muted reaction to its Q3 results, despite beating estimates and showing strength across the board.
The bank's adjusted earnings per share topped expectations, with wealth management and capital markets being strong points, as has been the case for the big banks this year. However, the market is trying to figure out where the right spot is for Royal Bank's multiple, which currently stands at 18.4 times trailing price-to-earnings (P/E).
The author views the recent sell-off as an opportunity to buy into Royal Bank, provided investors are in it for the long haul, specifically five years or more. The bank's powerful growth story remains unchanged, and the current correction is seen as overdue.