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Royal Caribbean
(NYSE:RCL)
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Rating:72Outperform
Price Target:
$339.00
▲(15.49% Upside)
Action:Reiterated
Date:07/28/26
The score is driven primarily by strong profitability and positive forward guidance, supported by an upward price trend. The main constraints are elevated leverage and a recent dip to negative TTM free cash flow, with valuation appearing fair rather than especially cheap.
Positive Factors
Profitability rebound & strong margins
Royal Caribbean shows a durable profitability recovery: high TTM margins and scaled revenue underpin sustainable earnings generation. Strong margins reflect pricing power and cost efficiencies that support reinvestment, debt servicing and shareholder returns across travel cycles.
Negative Factors
Elevated leverage
Material leverage leaves the company more exposed to demand shocks and higher interest rates. Even after improvement, leverage constrains strategic flexibility, amplifies refinancing and interest-cost risk, and makes sustained investment or payout growth contingent on dependable cash conversion.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability rebound & strong margins
Royal Caribbean shows a durable profitability recovery: high TTM margins and scaled revenue underpin sustainable earnings generation. Strong margins reflect pricing power and cost efficiencies that support reinvestment, debt servicing and shareholder returns across travel cycles.
Read all positive factors
Royal Caribbean Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks revenue into ticket fares, onboard spending, shore excursions, and other streams, showing which businesses drive growth and margins. Useful for spotting diversification, high-margin engines, and where top-line volatility may come from.
Breaks revenue into ticket fares, onboard spending, shore excursions, and other streams, showing which businesses drive growth and margins. Useful for spotting diversification, high-margin engines, and where top-line volatility may come from.
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The Fly
The FlyRoyal Caribbean (RCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$85.37B
Dividend Yield1.57%
Average Volume (3M)2.48M
Price to Earnings (P/E)19.6
Beta (1Y)1.52
Revenue Growth8.72%
EPS Growth21.01%
CountryUS
Employees108,000
SectorConsumer Cyclical
Sector Strength84
IndustryTravel Services
Share Statistics
EPS (TTM)16.27
Shares Outstanding268,194,980
10 Day Avg. Volume2,595,158
30 Day Avg. Volume2,476,781
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)7.53
Price to Sales (P/S)4.21
P/FCF Ratio61.15
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$350.19Price Target Upside19.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
EPS Forecast (FY)17.76
Revenue Forecast (FY)$19.55B
Royal Caribbean Business Overview & Revenue Model
Company Description
Royal Caribbean Cruises Ltd. is a prominent global operator within the cruise sector. The company manages several well-known cruise lines, such as Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises. Through these bran...
How the Company Makes Money
Royal Caribbean Group primarily makes money by selling cruise vacations and related travel products. Its core revenue stream is passenger ticket revenue (often called passenger cruise revenue), which includes fares paid for the cruise itinerary an...
Royal Caribbean Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial picture: strong Q1 results (11% revenue growth, adjusted EPS beat, higher EBITDA margins and cash generation), record demand and digital engagement, active capital returns and continued strategic investments (new ships, destinations, loyalty, and tech/AI). Near-term headwinds include higher fuel costs (~$0.62/shr fuel impact, ~$0.74 total with JV impact), moderation in Mediterranean and West Coast Mexico bookings affecting Q2/Q3 yields, and some incremental dry-dock and crew travel cost pressure. Management expects these issues to be largely near-term and reiterated double-digit revenue and EPS growth for 2026, supported by a strong balance sheet and robust booking trends, so positive operational momentum outweighs the highlighted challenges.Positive Updates
Revenue and Earnings Beat
Revenue grew 11% year-over-year in Q1 and adjusted EPS was $3.60, $0.37 above the midpoint of guidance and up 33% versus prior year; Q1 adjusted EPS outperformance driven by better-than-expected revenue, lower costs and stronger JV performance.
Negative Updates
Fuel Cost Headwind
Higher fuel prices are a material headwind to 2026 results: company expects fuel expense of $1.35 billion for the year, is ~60% hedged for 2026, and guidance includes a ~$0.62 per share headwind from fuel for the remainder of the year (total $0.74 per share headwind when combined with lower JV contribution).
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Earnings Beat
Revenue grew 11% year-over-year in Q1 and adjusted EPS was $3.60, $0.37 above the midpoint of guidance and up 33% versus prior year; Q1 adjusted EPS outperformance driven by better-than-expected revenue, lower costs and stronger JV performance.
Read all positive updates
Company Guidance
Royal Caribbean guided to another year of strong growth, forecasting full‑year revenue up roughly double digits with capacity +6.7% and net yield growth of +1.5% to +2.5%; full‑year adjusted EPS of $17.10–$17.50 (double‑digit EPS growth) which reflects a combined $0.74 headwind (≈$0.62 from higher fuel and $0.12 from lower TUI Cruises contribution). They expect fuel expense of about $1.35 billion with roughly 59–60% of remaining 2026 consumption hedged (fuel would be ≈4% lower on the forward curve), full‑year net cruise costs ex‑fuel roughly flat (about 50 bps better than prior guidance), and a continued focus on margin and cash‑flow expansion via the Perfecta targets (20% CAGR in adjusted EPS through 2027 and high‑teens ROIC). For Q2 specifically, capacity is guided +4.9%, net yield ≈+0.2% cc, net cruise costs ex‑fuel +4.6%–5.1% cc, and adjusted EPS $3.83–$3.93 (quarter hit by nearly $1 of phasing/headwinds).Royal Caribbean Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
58
Neutral
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.68B | 17.93B | 16.48B | 13.90B | 8.84B | 1.53B |
| Gross Profit | 8.71B | 8.40B | 7.83B | 6.13B | 2.22B | -1.21B |
| EBITDA | 7.22B | 6.91B | 6.09B | 4.56B | 615.00M | -2.67B |
| Net Income | 4.40B | 4.27B | 2.88B | 1.70B | -2.16B | -5.26B |
Balance Sheet | ||||||
| Total Assets | 44.64B | 41.62B | 37.07B | 35.13B | 33.78B | 32.26B |
| Cash, Cash Equivalents and Short-Term Investments | 875.00M | 940.00M | 388.00M | 497.00M | 1.94B | 2.70B |
| Total Debt | 23.52B | 22.64B | 20.82B | 22.13B | 23.99B | 21.69B |
| Total Liabilities | 34.18B | 31.37B | 29.34B | 30.23B | 30.91B | 27.17B |
| Stockholders Equity | 10.24B | 10.04B | 7.56B | 4.72B | 2.87B | 5.09B |
Cash Flow | ||||||
| Free Cash Flow | -416.00M | 1.24B | 2.00B | 580.00M | -2.23B | -4.11B |
| Operating Cash Flow | 6.79B | 6.46B | 5.26B | 4.48B | 481.00M | -1.88B |
| Investing Cash Flow | -7.07B | -5.01B | -3.45B | -3.92B | -2.99B | -2.15B |
| Financing Cash Flow | 428.00M | -1.02B | -1.92B | -1.99B | 1.74B | 3.04B |
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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $38.09B | 12.04 | 24.45% | 1.14% | 5.16% | 16.93% | |
72 Outperform | $85.37B | 19.56 | 43.83% | 1.70% | 8.72% | 21.01% | |
69 Neutral | $46.56B | 38.51 | 149.42% | ― | 20.78% | 119.41% | |
63 Neutral | $4.65B | 20.38 | -24.76% | 3.13% | 4.12% | -35.73% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $1.94B | -55.72 | 9.48% | ― | 19.15% | 7.51% | |
57 Neutral | $8.51B | 11.10 | 32.35% | ― | 6.21% | 2.45% |
* Consumer Cyclical Sector Average
RCL
Royal Caribbean
320.55
15.98
5.25%
CCL
Carnival
28.79
0.09
0.31%
TNL
Travel + Leisure Co
77.33
20.19
35.32%
NCLH
Norwegian Cruise Line
19.37
-5.10
-20.84%
LIND
Lindblad Expeditions Holdings
34.07
21.74
176.32%
VIK
Viking Holdings
106.19
49.23
86.43%
Royal Caribbean Corporate Events
Business Operations and StrategyExecutive/Board Changes
Royal Caribbean Adds Veteran Tech Leader to Board
Positive
Jul 20, 2026
On July 16, 2026, Royal Caribbean Group’s board appointed Tara Bunch, a veteran technology and operations executive, to its Board of Directors, with the company formally announcing the move in a July 20, 2026 press release. Bunch’s pri...
Executive/Board ChangesShareholder Meetings
Royal Caribbean Shareholders Back Board, Pay and Auditor
Positive
May 28, 2026
At its annual meeting held on May 28, 2026, Royal Caribbean shareholders elected all 13 director nominees to the board, each securing a majority of votes cast, reinforcing continuity in the company’s leadership and governance. Shareholders a...
Business Operations and StrategyRegulatory Filings and Compliance
Royal Caribbean Faces Setback on Mexico Destination Permits
Negative
May 20, 2026
On May 19, 2026, Mexico’s environmental authority SEMARNAT indicated it would deny Royal Caribbean’s initial application for environmental permits for its planned Perfect Day Mexico destination, a setback for the cruise operator’...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.