Here is some of the analyst reaction from Royal Bank of Canada's (NYSE:RY) disclosure of upcoming writedowns in the second quarter:
Dundee Securities analyst John Aiken, who has a 'sell' rating on the stock, dubbed it a "negative surprise" and said the C$855-million figure was above what the market was expecting. He said a figure of that size was not priced into the bank's stock.
Blackmont Capital analyst Brad Smith, who rates Royal a 'buy,' said:With recent speculation of a multi-billion dollar potential writedown, the market is likely to be more relieved than alarmed by this pre-release disclosure.
Desjardins Securities, analyst Michael Goldberg had this to say:The good news is that this is smaller than some observers have speculated, and the stock price could initially strengthen on this news. The bad news is that Royal's warning says nothing about broader credit quality (NPL formations and loss provisions for the quarter), where we have been concerned that there could be additional weakness.