10 Undervalued Canadian Stocks to Buy Now

6. Royal Bank of Canada (NYSE:RY)

Forward P/E as of April 4: ~11.5x

Number of Hedge Fund Holders: 31

Royal Bank of Canada (NYSE:RY) operates as a diversified financial services company. The company is headquartered in Toronto, Canada. CIBC Capital Markets analyst Paul Holden upped the company’s stock to “Outperformer” from “Neutral.” The analyst believes that this bank typically performs well in down markets. Furthermore, he noted that Royal Bank of Canada (NYSE:RY)’s revenue mix makes it less vulnerable to slower loan growth, bad credit, and tightening margins. Notably, the earnings and balance sheet diversification are tagged as positive attributes when economic conditions get worse.

Elsewhere, Canaccord Genuity analyst Matthew Lee gave a “Buy” rating on the company’s stock, backed by factors demonstrating its healthy financial position and growth potential. Royal Bank of Canada (NYSE:RY)’s premium valuation exhibits its consistent earnings growth and strong RoE, which are being aided by a strategic emphasis on cost management and efficiency improvements. Notably, in Q1 2025, the bank saw an adjusted ROE of 17.2%, reflecting a rise of 230 bps YoY. Lee expects that Royal Bank of Canada (NYSE:RY)’s focus on personal and commercial banking, by using distribution network and technological innovations, can fuel client acquisition and loan growth. Overall, despite the challenges, its comprehensive growth strategy and efficiency gains place it well for future growth, justifying the analyst’s rating.