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Royal Caribbean (RCL)
NYSE:RCL
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Royal Caribbean
(NYSE:RCL)
76Outperform
Positive Factors
Bookings
April bookings are higher than the year-ago period with close-in bookings particularly strong, while booked load factors remain in line with prior years at higher prices.
Earnings
RCL reported solid 1Q25 EPS of $2.71 that beat forecasts driven largely by expense timing and modest net yield upside.
Financial Strategy
RCL's investor day highlighted the company's earnings strategy of moderate capacity growth, yield growth, and strong cost controls, which is expected to drive significant EPS growth.
Negative Factors
Consumer Health
Concerns about consumer health and potential changes in corporate tax structures are impacting RCL shares.
Cost Management
Net cruise costs excluding fuel are expected to rise due to higher dry dock days.
Royal Caribbean (RCL) vs. S&P 500 (SPY)
Market Cap
$58.74B
Dividend Yield0.78%
Average Volume (3M)2.77M
Price to Earnings (P/E)19.8
Beta (1Y)1.48
Revenue Growth13.66%
EPS Growth49.86%
CountryUS
Employees105,950
SectorConsumer Cyclical
Sector Strength66
IndustryTravel Services
Share Statistics
EPS (TTM)10.54
Shares Outstanding271,555,800
10 Day Avg. Volume1,916,128
30 Day Avg. Volume2,774,611
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.44
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit10.79
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$270.83Price Target Upside26.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering21
Royal Caribbean Business Overview & Revenue Model
Company DescriptionRoyal Caribbean Group (RCL) is a prominent global cruise holding company that operates a diverse portfolio of cruise line brands, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. The company is renowned for offering innovative cruise experiences, from family-friendly adventures to luxurious, upscale voyages, across various destinations worldwide. Royal Caribbean is known for its state-of-the-art ships, exceptional service, and a wide range of onboard amenities that cater to diverse passenger demographics.
How the Company Makes MoneyRoyal Caribbean Group generates revenue primarily through the sale of cruise tickets and onboard services. The company's primary revenue stream comes from passengers purchasing cruise vacations, which include accommodation, meals, and access to onboard entertainment and facilities. Additionally, Royal Caribbean earns substantial income from onboard spending, including specialty dining, beverage packages, shore excursions, spa services, and retail purchases. The company also benefits from partnerships with travel agencies and online travel platforms, which help in marketing and selling its cruise offerings. Furthermore, Royal Caribbean's revenue is influenced by factors such as occupancy rates, ticket pricing strategies, and operational efficiencies that help manage costs and enhance profitability.
Royal Caribbean Financial Statement Overview
Summary
Royal Caribbean demonstrates a solid financial recovery with strong profitability and improved cash flow metrics. Revenue growth, enhanced operational efficiency, and effective cost control highlight robust performance. However, the balance sheet's leverage requires careful management, posing potential risks.Income Statement
Royal Caribbean's income statement shows a strong recovery with a notable improvement in profitability metrics. The TTM gross profit margin stands at 48.23%, indicating robust cost management. Net profit margin has increased to 19.38% in TTM, reflecting enhanced operational efficiency. Revenue growth rate is impressive at 20.57% from 2023 to 2024, demonstrating strong demand recovery post-pandemic. EBIT and EBITDA margins are also strong at 25.67% and 37.43% respectively, highlighting effective cost control and operational leverage.85
Very Positive
Balance Sheet
The balance sheet shows improvement in equity with a debt-to-equity ratio of 2.53, reflecting a significant decrease in leverage compared to previous years. Return on equity has improved to 40.79% in TTM, indicating efficient use of shareholder funds. However, the equity ratio remains low at 21.26%, suggesting a relatively high level of liabilities compared to assets, which could pose risks if not managed properly.70
Positive
Cash Flow
Cash flow metrics indicate solid performance with a strong free cash flow growth rate of 5.66% in TTM. The operating cash flow to net income ratio is 1.71, suggesting healthy cash generation relative to net income. Free cash flow to net income ratio stands at 0.65, showing positive cash flow after capital expenditures. This reflects effective cash management and supports ongoing investments and debt reduction.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 16.48B | 13.90B | 8.84B | 1.53B | 2.21B | Gross Profit |
| 7.83B | 6.13B | 2.23B | -1.13B | -556.30M | EBIT |
| 4.11B | 2.88B | -847.93M | -3.87B | -4.60B | EBITDA |
| 6.09B | 4.47B | 586.13M | -2.72B | -3.69B | Net Income Common Stockholders |
| 2.88B | 1.70B | -2.10B | -6.57B | -6.50B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 388.00M | 497.00M | 1.94B | 2.70B | 3.68B | Total Assets |
| 37.07B | 35.13B | 33.78B | 32.26B | 32.47B | Total Debt |
| 20.82B | 22.13B | 23.99B | 21.66B | 20.00B | Net Debt |
| 20.43B | 21.63B | 22.06B | 18.96B | 16.31B | Total Liabilities |
| 29.34B | 30.23B | 30.91B | 27.17B | 23.70B | Stockholders Equity |
| 7.56B | 4.72B | 2.87B | 5.09B | 8.76B |
| Cash Flow | Free Cash Flow | |||
| 2.00B | 580.00M | -2.23B | -4.11B | -5.70B | Operating Cash Flow |
| 5.26B | 4.48B | 481.86M | -1.88B | -3.73B | Investing Cash Flow |
| -3.45B | -3.92B | -2.99B | -2.14B | -2.18B | Financing Cash Flow |
| -1.92B | -1.99B | 1.74B | 3.04B | 9.35B |
Royal Caribbean Technical Analysis
Positive
214.91
Price Trends
213.06
Positive
228.61
Negative
206.28
Positive
Market Momentum
0.66
Negative
56.55
Neutral
82.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCL, the sentiment is Positive. The current price of 214.91 is above the 20-day moving average (MA) of 198.49, above the 50-day MA of 213.06, and above the 200-day MA of 206.28, indicating a bullish trend. The MACD of 0.66 indicates Negative momentum. The RSI at 56.55 is Neutral, neither overbought nor oversold. The STOCH value of 82.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCL.
Royal Caribbean Risk Analysis
Royal Caribbean disclosed 36 risk factors in its most recent earnings report. Royal Caribbean reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Royal Caribbean Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $58.74B | 19.77 | 49.55% | 0.78% | 13.66% | 49.86% | |
75 Outperform | $10.75B | 45.97 | 23.09% | ― | 28.51% | 367.34% | |
71 Outperform | $20.57B | 18.02 | 79.84% | 0.25% | 6.64% | 69.85% | |
69 Neutral | $37.80B | 17.02 | 12.91% | 0.47% | 18.12% | 69.44% | |
60 Neutral | $6.58B | 11.55 | 3.14% | 4.05% | 2.58% | -21.37% | |
60 Neutral | $7.73B | 9.84 | 105.46% | ― | 10.87% | 433.82% | |
60 Neutral | $18.37B | 127.89 | 34.73% | ― | 13.23% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
RCL
Royal Caribbean
214.91
78.51
57.56%
TCOM
Trip.com Group Sponsored ADR
58.99
10.47
21.58%
EXPE
Expedia
156.93
24.07
18.12%
MMYT
Makemytrip
104.82
37.30
55.24%
NCLH
Norwegian Cruise Line
16.03
-0.05
-0.31%
VIK
Viking Holdings Ltd
41.03
14.04
52.02%
Royal Caribbean Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -0.65%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong first quarter performance with record-breaking bookings and strategic growth plans. Despite macroeconomic uncertainties, the company maintains a positive outlook for 2025, with an investment grade balance sheet and a focus on delivering high-quality vacation experiences. However, challenges such as a shorter booking window and yield headwinds in the third quarter due to new ship delivery timings are noted.Q1-2025 Updates
Positive Updates
Record-Breaking WAVE Season
The first quarter saw the best WAVE season in the company's history, with bookings outpacing last year across all products and close-in bookings trending particularly well.
Strong First Quarter Results
Yields grew 5.6% and adjusted earnings per share were $2.71, which was $0.23 higher than guidance. The quarter's performance was driven by better-than-expected close-in demand and favorable timing of expenses.
Positive Outlook and Growth Strategy
Capacity is expected to grow 5.5% in 2025 with yield growth projected between 2.6% to 4.6%. Full year adjusted earnings per share is expected to grow approximately 28% to between $14.55 and $15.55.
Investment Grade Balance Sheet
S&P Global Ratings upgraded the company's credit rating to investment grade, reflecting the strength of its financial position and consistent performance.
Successful New Ship Launches
The introduction of Star of the Seas, Celebrity Xcel, and other ships have driven strong pricing and load factors, supporting yield growth.
Negative Updates
Macro Environment Uncertainty
The company acknowledges heightened macroeconomic uncertainties, which could impact consumer behavior, although they have not seen a change yet.
Booking Window Compression
The booking window is about a week shorter, driven by strong close-in demand, indicating consumers might be booking more last-minute than in previous years.
Third Quarter Yield Headwinds
The timing of new ship deliveries, like Star of the Seas entering late in August, presents a headwind of approximately 140 basis points on yield growth in the second half of 2025.
Company Guidance
During Royal Caribbean Group's first-quarter 2025 earnings call, the company shared strong results and an optimistic outlook for the remainder of the year, with several key metrics highlighted. The company reported a net yield increase of 5.6% and adjusted earnings per share of $2.71, surpassing guidance by $0.23. The success of WAVE Season, the best in company history, contributed to a robust booking position for 2025 and 2026, with bookings in April outpacing last year. Royal Caribbean anticipates capacity growth of 5.5% in 2025, driven by new ships such as Star of the Seas and Celebrity Xcel, and expects yield growth to range between 2.6% and 4.6%. The company projects full-year adjusted earnings per share to grow approximately 28%, landing between $14.55 and $15.55. Additionally, Royal Caribbean emphasized strong cash flow generation, robust liquidity, and minimal near-term maturities, underscoring their financial strength and strategic focus on growth and shareholder returns.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.