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Royal Caribbean
(NYSE:RCL)
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Rating:67Neutral
Price Target:
$326.00
▲(11.53% Upside)
Action:Downgraded
Date:08/21/26
Strong profitability and a constructive earnings outlook (raised/reaffirmed EPS guidance, robust quarterly cash flow and capital returns) support the score, but elevated leverage and currently negative TTM free cash flow constrain the financial profile. Technically, near-term momentum is mixed with the stock below key short-term moving averages, while valuation is reasonable rather than clearly cheap.
Positive Factors
Profitability and revenue recovery
The sharp recovery in revenue and profitability shows stronger operating scale and pricing power than during the downturn. Sustained margins and earnings provide resources for fleet investment, debt service, and shareholder returns.
Negative Factors
Elevated leverage
Although leverage has improved materially from 2022, debt remains high relative to equity. This limits financial flexibility and leaves earnings and cash flow more exposed to demand slowdowns, refinancing needs, and interest-rate pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability and revenue recovery
The sharp recovery in revenue and profitability shows stronger operating scale and pricing power than during the downturn. Sustained margins and earnings provide resources for fleet investment, debt service, and shareholder returns.
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.
Data provided by:
The Fly
The FlyRoyal Caribbean (RCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$77.78B
Dividend Yield1.76%
Average Volume (3M)2.48M
Price to Earnings (P/E)17.5
Beta (1Y)1.50
Revenue Growth8.72%
EPS Growth21.01%
CountryUS
Employees107,975
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
$352.08Price Target Upside20.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)17.78
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:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveys a predominantly positive operational and financial tone: solid revenue (+6%), yield expansion (Q2 +1.2%), an earnings beat (Q2 EPS $4.21, $0.33 ahead), strong cash flow ($1.9B) and meaningful capital returns alongside robust loyalty and digital momentum (record pricing, app engagement, NPS in the low‑to‑mid 70s). Headwinds are present but described as modest and largely near-term—principally geopolitical disruption affecting Europe bookings and a Q3 mix/timing headwind (~200 bps) to yields, plus continued year-over-year cost increases (3.9% APCD ex-fuel). On balance, the positive metrics, strategic progress (loyalty, tech, product expansion) and financial strength outweigh the limited and specific lowlights.Positive Updates
Revenue and Volume Growth
Total revenue grew 6% year-over-year in Q2 2026 while the company delivered 2.4 million vacations; capacity increased 5% year-over-year in the quarter and is expected to grow 6.6% for the full year.
Negative Updates
Geopolitical Impact on Europe Bookings and Q3 Yield
Prolonged conflict in the Middle East modestly weighed on near-term bookings for Mediterranean/Europe itineraries, primarily impacting Q3; this led to a reduced near-term yield outlook and a guidance profile that keeps full-year yield growth moderate (Q3 net yields expected roughly flat).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Volume Growth
Total revenue grew 6% year-over-year in Q2 2026 while the company delivered 2.4 million vacations; capacity increased 5% year-over-year in the quarter and is expected to grow 6.6% for the full year.
Read all positive updates
Company Guidance
Royal Caribbean reaffirmed full‑year guidance calling for net yield growth of 1.75%–2.25% with capacity up 6.6%, driving roughly 9% total revenue growth and full‑year adjusted EPS of $17.73–$17.87 (≈14% growth); net cruise costs excluding fuel are expected to be approximately flat for the year, fuel expense about $1.3 billion with ~58% of remaining 2026 consumption hedged, adjusted EBITDA was $1.8 billion (38% margin) and operating cash flow $1.9 billion in Q2, liquidity stood at $6.9 billion with leverage below 3x and revolver capacity increased to $6.6 billion. For Q3 the company expects capacity +8.5%, net yields roughly flat, net cruise costs ex‑fuel down ~1.1%–1.6% (constant currency) and Q3 adjusted EPS of $6.26–$6.36 (double‑digit YoY growth). The company returned capital in Q2 ($404 million dividends, 0.8 million shares repurchased; $805 million remaining buyback authorization) and noted deployment mix of Caribbean 57% of full‑year capacity (44% in Q3), Europe 14% (28% in Q3) and Alaska 5% (13% in Q3).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 | $35.05B | 10.80 | 24.45% | 1.14% | 5.16% | 16.93% | |
72 Outperform | $4.50B | 19.22 | -24.76% | 3.13% | 4.12% | -35.73% | |
70 Outperform | $7.85B | 9.97 | 32.35% | ― | 6.21% | 2.45% | |
67 Neutral | $77.78B | 17.50 | 43.83% | 1.70% | 8.72% | 21.01% | |
62 Neutral | $40.39B | 29.64 | 149.42% | ― | 20.02% | 62.66% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $2.05B | -81.05 | 9.06% | ― | 18.27% | -39.00% |
* Consumer Cyclical Sector Average
RCL
Royal Caribbean
284.80
-74.89
-20.82%
CCL
Carnival
24.95
-7.03
-21.97%
TNL
Travel + Leisure Co
71.69
11.07
18.27%
NCLH
Norwegian Cruise Line
16.65
-8.74
-34.42%
LIND
Lindblad Expeditions Holdings
30.06
15.23
102.70%
VIK
Viking Holdings
89.81
26.04
40.83%
Royal Caribbean Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Royal Caribbean Completes $1.25 Billion Senior Notes Offering
Positive
Aug 20, 2026
On August 20, 2026, Royal Caribbean Cruises Ltd. completed a $1.25 billion offering of 5.550% senior notes due 2034, issued under its existing indenture structure and sold through a syndicate led by major investment banks. The notes, registered un...
Business Operations and StrategyPrivate Placements and Financing
Royal Caribbean Announces $1.25 Billion Senior Notes Offering
Positive
Aug 7, 2026
On August 6, 2026, Royal Caribbean Cruises Ltd. entered into an underwriting agreement with a syndicate of banks led by BNP Paribas Securities Corp., BofA Securities, Inc. and Citigroup Global Markets Inc. for a public offering of $1.25 billion of...
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...
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.