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Valued at a market cap of $68.3 billion, Royal Caribbean Cruises Ltd. (RCL) is a cruise company that owns and operates several cruise brands, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. The Miami, Florida-based company’s fleet visits destinations across all seven continents and features innovative ships equipped with advanced amenities, entertainment, and dining options.
Shares of this cruise company have considerably outpaced the broader market over the past 52 weeks. RCL has soared 78.5% over this time frame, while the broader S&P 500 Index ($SPX) has gained 12.3%. Moreover, on a YTD basis, the stock is up 9%, compared to SPX’s marginal rise.
Zooming in further, RCL’s outperformance looks pronounced when compared to the Invesco Dynamic Leisure and Entertainment ETF’s (PEJ) 17.2% return over the past 52 weeks and 1% uptick on a YTD basis.
On Apr. 29, shares of RCL surged marginally after its mixed Q1 earnings release. The company posted revenue of $4 billion, which improved 7.3% from the year-ago quarter but marginally missed the consensus estimates. On the other hand, its adjusted net income grew by 53.1% year-over-year to $2.71 per share and exceeded the forecasted figure by 7.1%. Stronger than expected pricing on close-in demand and lower costs, partly due to favorable timing, aided the company. Additionally, the number of passengers carried rose 9.1% year-over-year, while occupancy reached 108.8%, up from 107% in the same quarter last year, highlighting robust demand.
The company also raised its fiscal 2025 adjusted EPS guidance to a range of $14.55 to $15.55, further strengthening investor confidence.
For the current fiscal year, ending in December, analysts expect RCL’s EPS to grow 29.8% year over year to $15.32. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a “Strong Buy” which is based on 19 “Strong Buy,” one “Moderate Buy,” and five “Hold” ratings.
This configuration is more bullish than a month ago, with 17 analysts suggesting a “Strong Buy” rating.
On May 9, Macquarie analyst Paul Golding maintained an “Outperform” rating on RCL but lowered its price target to $265, which indicates a 5.4% potential upside from the current levels.
The mean price target of $267.56 represents a 6.4% premium from RCL’s current price levels, while the Street-high price target of $330 suggests an upside potential of 31.3%.
