Royal Caribbean (RCL)
NYSE:RCL
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Royal Caribbean
(NYSE:RCL)
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Rating:73Outperform
Price Target:
$306.00
▲(11.68% Upside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by strong financial performance (sharp margin and profitability recovery) and upbeat 2026 guidance for revenue, earnings, EBITDA, and cash flow. Offsetting factors are balance-sheet leverage and weaker TTM free-cash-flow conversion, plus only mixed near-term technical momentum and a fair (not discounted) valuation with a modest dividend.
Positive Factors
Revenue & Margin Recovery
Royal Caribbean has materially rebuilt scale and profitability since the downturn, with revenue rising to ~$17.9B TTM and net margin expanding to ~24%. This durable improvement reflects stronger demand, pricing power and operating leverage that support sustained earnings through the cycle.
Negative Factors
Elevated Leverage
Debt remaining around $22B and slightly over 2x equity leaves meaningful leverage for a cyclical travel business. Elevated leverage reduces financial flexibility, raises refinancing and interest-rate sensitivity, and limits downside protection if travel demand weakens over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue & Margin Recovery
Royal Caribbean has materially rebuilt scale and profitability since the downturn, with revenue rising to ~$17.9B TTM and net margin expanding to ~24%. This durable improvement reflects stronger demand, pricing power and operating leverage that support sustained earnings through the cycle.
Read all positive factors
Royal Caribbean (RCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$74.12B
Dividend Yield1.09%
Average Volume (3M)2.60M
Price to Earnings (P/E)17.7
Beta (1Y)1.63
Revenue Growth8.61%
EPS Growth49.58%
CountryUS
Employees105,950
SectorConsumer Cyclical
Sector Strength84
IndustryTravel Services
Share Statistics
EPS (TTM)2.80
Shares Outstanding270,528,300
10 Day Avg. Volume2,524,892
30 Day Avg. Volume2,600,843
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 Cap1.26
Enterprise Value/Revenue5.20
Enterprise Value/Gross Profit11.10
Enterprise Value/Ebitda13.49
Forecast
1Y Price Target
$368.93Price Target Upside34.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)18.03
Revenue Forecast (FY)$19.73B
Royal Caribbean Business Overview & Revenue Model
Company Description
Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises brands, which comprise a range of itineraries that call on...
How the Company Makes Money
Royal Caribbean Group primarily makes money by selling cruise vacations and monetizing guest spending before and during a voyage. Its core revenue stream is passenger ticket revenue, which includes fares for cruise itineraries and associated charg...
Royal Caribbean Key Performance Indicators (KPIs)
Royal Caribbean Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call communicated strong, broad-based operational and financial momentum: record guests, double-digit revenue growth expectations for 2026, sizable EBITDA and cash flow expansion, continued fleet and destination investments, digital/AI adoption, and disciplined capital returns and balance sheet strength. Management acknowledged manageable near-term headwinds from higher capacity (notably in the Caribbean), dry-dock timing, China itinerary changes, and cost pressure from ramping private destinations and emissions regulations, but provided guidance and mitigation plans. Overall, the positive achievements, guidance, and strategic investments substantially outweigh the outlined challenges.Positive Updates
Record Guest Volume and Strong Customer Satisfaction
Delivered a record 9.4 million vacations in 2025 with very high guest satisfaction and NPS that outpaces industry standards; total guests up 45% since 2019 with millennials and younger nearly doubling.
Negative Updates
Elevated Capacity in Caribbean and Industry Supply
2026 capacity growth (6.7%) and region-specific capacity increases (Caribbean +8%) create elevated competition; management noted elevated regional capacity could pressure close-in pricing dynamics despite current strong demand.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Guest Volume and Strong Customer Satisfaction
Delivered a record 9.4 million vacations in 2025 with very high guest satisfaction and NPS that outpaces industry standards; total guests up 45% since 2019 with millennials and younger nearly doubling.
Read all positive updates
Company Guidance
Royal Caribbean guided 2026 for double‑digit revenue growth with full‑year net yield growth of 1.5%–3.5% and capacity up 6.7% (APCDs +8.5% in Q1/Q3, +5% in Q2/Q4); full‑year adjusted EPS of $17.70–$18.10 (≈14% YoY at midpoint), adjusted EBITDA just shy of $8.0B (margin just over 40%), and operating cash flow >$7.0B. They expect full‑year net cruise costs excluding fuel to be flat to +1% (after a 10 bps decrease in 2025) but noted ~200 bps of cost headwinds from private‑destination ramp‑up; fuel expense is projected at ≈$1.17B with ~60% hedged, ~10% of fuel consumption from LNG/biofuel blends (vs 8% in 2025), and fuel consumption per APCD improving ~4% YoY. First‑quarter guidance: capacity +8.5%, net yields +1.0%–1.5%, net cruise costs ex‑fuel +0.9%–1.4%, and Q1 adjusted EPS $3.18–$3.28; balance sheet highlights include $7.2B liquidity, leverage <3x, planned capital investment ≈$5.0B (non‑ship ~$1.8B), continued strategic investments and enhanced capital returns.Royal Caribbean Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
62
Positive
Cash Flow
68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.93B | 16.48B | 13.90B | 8.84B | 1.53B |
| Gross Profit | 8.40B | 7.83B | 6.13B | 2.22B | -1.21B |
| EBITDA | 6.91B | 6.09B | 4.56B | 615.00M | -2.67B |
| Net Income | 4.27B | 2.88B | 1.70B | -2.16B | -5.26B |
Balance Sheet | |||||
| Total Assets | 41.62B | 37.07B | 35.13B | 33.78B | 32.26B |
| Cash, Cash Equivalents and Short-Term Investments | 940.00M | 388.00M | 497.00M | 1.94B | 2.70B |
| Total Debt | 22.64B | 20.82B | 22.13B | 23.99B | 21.69B |
| Total Liabilities | 31.37B | 29.34B | 30.23B | 30.91B | 27.17B |
| Stockholders Equity | 10.04B | 7.56B | 4.72B | 2.87B | 5.09B |
Cash Flow | |||||
| Free Cash Flow | 1.24B | 2.00B | 580.00M | -2.23B | -4.11B |
| Operating Cash Flow | 6.46B | 5.26B | 4.48B | 481.00M | -1.88B |
| Investing Cash Flow | -5.01B | -3.45B | -3.92B | -2.99B | -2.15B |
| Financing Cash Flow | -1.02B | -1.92B | -1.99B | 1.74B | 3.04B |
Royal Caribbean Technical Analysis
Negative
274.00
Price Trends
298.74
Negative
285.00
Negative
300.99
Negative
Market Momentum
-8.26
Negative
43.80
Neutral
57.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCL, the sentiment is Negative. The current price of 274 is below the 20-day moving average (MA) of 281.20, below the 50-day MA of 298.74, and below the 200-day MA of 300.99, indicating a bearish trend. The MACD of -8.26 indicates Negative momentum. The RSI at 43.80 is Neutral, neither overbought nor oversold. The STOCH value of 57.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $74.12B | 17.69 | 45.87% | 1.09% | 8.61% | 49.58% | |
70 Outperform | $35.02B | 12.33 | 25.45% | ― | 6.39% | 39.66% | |
63 Neutral | $4.41B | 20.12 | -25.97% | 3.10% | 3.17% | 12.57% | |
63 Neutral | $31.91B | 27.60 | 237.91% | ― | 20.04% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $1.18B | -26.67 | 13.32% | ― | 18.50% | 7.78% | |
50 Neutral | $9.04B | 24.01 | 22.91% | ― | 3.59% | 19.09% |
* Consumer Cyclical Sector Average
RCL
Royal Caribbean
274.00
69.43
33.94%
CCL
Carnival
25.28
5.50
27.82%
TNL
Travel + Leisure Co
70.69
25.92
57.88%
NCLH
Norwegian Cruise Line
19.85
0.70
3.66%
LIND
Lindblad Expeditions Holdings
18.16
8.63
90.56%
VIK
Viking Holdings
71.59
32.25
81.98%
Royal Caribbean Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Royal Caribbean Completes $2.5 Billion Senior Notes Offering
Positive
Feb 27, 2026
On February 27, 2026, Royal Caribbean Cruises Ltd. completed a $2.5 billion senior notes offering, issuing $1.25 billion of 4.750% notes due 2033 and $1.25 billion of 5.250% notes due 2038 under an existing indenture structure. The notes, register...
Business Operations and StrategyExecutive/Board Changes
Royal Caribbean Adds Marine Expert to Board of Directors
Positive
Feb 17, 2026
On February 10, 2026, Royal Caribbean Group appointed Christopher J. Wiernicki, former Chairman and CEO of American Bureau of Shipping, to its Board of Directors, with the move announced publicly on February 17, 2026. Wiernicki, a recognized marin...
Business Operations and StrategyPrivate Placements and Financing
Royal Caribbean Issues $2.5 Billion in Senior Notes
Positive
Feb 13, 2026
On February 12, 2026, Royal Caribbean Cruises Ltd. agreed to issue $2.5 billion of senior notes in an underwritten public offering, split between $1.25 billion of 4.750% notes due 2033 and $1.25 billion of 5.250% notes due 2038, with closing expec...
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.