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1. Company Snapshot

1.a. 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 approximately 1,000 destinations.


As of February 25, 2022, it operated 61 ships.The company was founded in 1968 and is headquartered in Miami, Florida.

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1.b. Last Insights on RCL

Breaking News: Royal Caribbean Cruises Ltd reported fourth quarter results that met Wall Street expectations and pointed to stronger growth ahead. The company is set to launch a river cruise business through its upscale Celebrity brand with demand being strong. Renaissance Group LLC sold 18,648 shares, reducing its holdings by 14.4%. Unusually high options volume was seen with 17,418 call options purchased. Analysts forecast growth, with some watching the stock surge. A recent development saw the company doubling its expected fleet size from 10 ships to 20.

1.c. Company Highlights

2. Royal Caribbean's Strong 2025 Performance and Promising 2026 Outlook

Royal Caribbean Group reported a robust financial performance in 2025, with revenue reaching $18 billion and adjusted earnings per share growing 33% to $15.64. The company's net yields grew 2.5% in constant currency, and adjusted EBITDA reached $7 billion, representing a 17.6% increase. The strong performance was driven by high demand for their brands and vacation experiences, disciplined execution of strategies, and robust financial management, resulting in $6.5 billion of operating cash flow and $2 billion returned to shareholders.

Publication Date: Feb -02

📋 Highlights
  • Record Revenue & Earnings Growth: Achieved $18 billion in revenue with 33% earnings growth, driven by 9.4 million vacations and high customer satisfaction.
  • Strong Cash Flow & Shareholder Returns: Generated $6.5 billion operating cash flow and returned $2 billion to shareholders, with leverage below 3x.
  • Strategic Expansion of River Cruises: Added 10 Celebrity River Cruise ships, becoming one of Europe’s largest operators and attracting 80% existing loyal customers.
  • 2026 Financial Projections: Targeting 1.5–3.5% yield growth, 14% EPS increase to $17.70–$18.10, and $8 billion adjusted EBITDA (13% growth) with over 40% margins.
  • Caribbean Market Momentum: 57% capacity in the Caribbean (8% growth) with double-digit revenue growth, fueled by strong pricing and loyalty to top-rated Royal Beach Club experiences.

2026 Guidance and Expectations

For 2026, Royal Caribbean expects yield growth of 1.5% to 3.5%, with a projected capacity increase of 6.7%. The company anticipates double-digit revenue growth, driven by its leading vacation platform and strategic investments. Adjusted earnings per share are expected to grow 14% year-over-year to $17.70-$18.10, representing a 23% CAGR over the first two years. The company's guidance is supported by strong booking trends, with the best seven booking weeks in the company's history since the last earnings call.

Valuation and Pricing

Analyzing Royal Caribbean's valuation metrics, the current P/E Ratio stands at 20.59, and the EV/EBITDA ratio is 15.9. The company's ROE is 45.87%, indicating strong profitability. With a Net Debt / EBITDA ratio of 3.07, Royal Caribbean's leverage is manageable. The market appears to have priced in a significant level of growth, as reflected in the P/S Ratio of 4.94. Actual EPS came out at $2.80, in line with estimates, suggesting that the company's performance is largely as expected by the market.

Operational Highlights and Future Plans

The company is expanding its Celebrity River Cruises brand with 10 additional ships, making it one of the largest European river cruise operators. Royal Caribbean is also launching new Discovery class ships, which are expected to redefine the guest experience. The company's loyalty program, Points Choice, offers consumers flexibility in earning and redeeming points across its three vacation brands. With a strong balance sheet and liquidity of $7.2 billion, Royal Caribbean is well-positioned to invest in strategic growth initiatives, including private destinations and fleet modernization.

Segment Performance and Industry Trends

In the Caribbean, Royal Caribbean sees strong demand for its brands and destinations, with pricing higher than last year. The company attributes this to its high-quality ships, destinations, and brands, which have gained significant loyalty and trust from guests. The industry is more rational and price-integrity-focused than in the past, with promotions similar to those seen in previous years. The company's yield management models, informed by AI, are helping to drive significant margins.

3. NewsRoom

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Why Royal Caribbean Rallied Double-Digits in January

16:15

Source: fool.com

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Royal Caribbean Cruises Ltd. $RCL Shares Sold by Renaissance Group LLC

Feb -07

Source: defenseworld.net

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Royal Caribbean Cruises Sees Unusually High Options Volume (NYSE:RCL)

Feb -07

Source: defenseworld.net

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Royal Caribbean Stock Surges Friday: What Investors Are Watching

Feb -06

Source: benzinga.com

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Should Viking Investors Be Worried About Royal Caribbean?

Feb -06

Source: fool.com

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Royal Caribbean Stock Just Reached an All-Time High-Is it Still a Good Buy?

Feb -05

Source: fool.com

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Ronald Muhlenkamp's Strategic Exit from JD.com Inc: A 13F Filing Insight

Feb -05

Source: gurufocus.com

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Don't You Dare Buy the Cheapest Cruise Line Stock

Feb -04

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.30%)

6. Segments

Recreational - Cruise Lines

Expected Growth: 8.3%

Driven by increasing consumer spending on luxury travel, Royal Caribbean Cruises Ltd. benefits from its strong brand recognition, diverse itineraries, and ongoing ship modernization, fueling growth in the premium cruise segment.

7. Detailed Products

Cruises

Royal Caribbean offers a wide range of cruise itineraries to destinations around the world, including the Caribbean, Alaska, Europe, and more.

Shore Excursions

Royal Caribbean offers a variety of shore excursions at each port of call, including snorkeling trips, cultural tours, and adventure activities.

Hotel Stays

Royal Caribbean offers pre- and post-cruise hotel stays in select cities, allowing guests to extend their vacation.

Flight Services

Royal Caribbean offers flight services to and from cruise departure ports, making it easy to get to and from the ship.

Cruise and Stay Packages

Royal Caribbean offers packages that combine a cruise with a hotel stay, allowing guests to explore destinations before or after their cruise.

Wedding and Honeymoon Packages

Royal Caribbean offers romantic wedding and honeymoon packages, complete with ceremony and reception venues, flowers, and photography.

Specialty Dining

Royal Caribbean offers a range of specialty dining options, including fine dining restaurants and casual eateries.

Spa and Wellness

Royal Caribbean offers a range of spa and wellness services, including massages, facials, and fitness classes.

8. Royal Caribbean Cruises Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Royal Caribbean Cruises Ltd. faces moderate threat from substitutes, as customers have alternative options for leisure activities such as land-based vacations, theme parks, and other forms of entertainment.

Bargaining Power Of Customers

Royal Caribbean Cruises Ltd. has a high bargaining power of customers, as customers have many options for cruise vacations and can easily switch to competitors if they are not satisfied with the services.

Bargaining Power Of Suppliers

Royal Caribbean Cruises Ltd. has a low bargaining power of suppliers, as the company is a large buyer of goods and services and has the ability to negotiate favorable prices.

Threat Of New Entrants

Royal Caribbean Cruises Ltd. faces a low threat of new entrants, as the cruise industry has high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

Royal Caribbean Cruises Ltd. operates in a highly competitive industry, with several major players competing for market share, which leads to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 82.00%
Debt Cost 6.36%
Equity Weight 18.00%
Equity Cost 16.39%
WACC 8.17%
Leverage 455.48%

11. Quality Control: Royal Caribbean Cruises Ltd. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Booking

A-Score: 5.8/10

Value: 3.6

Growth: 8.7

Quality: 8.0

Yield: 1.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Lowe's

A-Score: 5.7/10

Value: 5.7

Growth: 6.7

Quality: 5.2

Yield: 4.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
D.R. Horton

A-Score: 5.5/10

Value: 6.3

Growth: 7.6

Quality: 7.1

Yield: 2.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Airbnb

A-Score: 5.1/10

Value: 2.1

Growth: 9.2

Quality: 8.7

Yield: 0.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Royal Caribbean Cruises

A-Score: 4.8/10

Value: 2.5

Growth: 6.8

Quality: 6.3

Yield: 1.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Lennar

A-Score: 4.8/10

Value: 6.8

Growth: 4.3

Quality: 5.9

Yield: 3.0

Momentum: 2.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

347.3$

Current Price

347.3$

Potential

-0.00%

Expected Cash-Flows