Royal Caribbean Reports Record Q4 Earnings Amid Strong Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10h ago
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Source: Fool
- Earnings Growth: Royal Caribbean's Q4 revenue and adjusted EPS grew by 13% and 72%, respectively, despite missing Wall Street expectations, showcasing the company's success in streamlining efficiencies and enhancing market optimism about its future.
- Future Guidance: Management projects double-digit sales and adjusted EPS growth for 2026, with capacity expected to rise nearly 7%, indicating significant growth potential for the company in the coming years.
- Record Bookings: CEO Jason Liberty announced that the company experienced the best seven booking weeks in its history, reflecting strong demand at the start of 2026 and further solidifying its market position.
- Investment Plans: Royal Caribbean plans to double its Celebrity River Cruises fleet to 20 ships by 2031 and invest $5 billion in new initiatives in 2026 to capitalize on the growing market demand.
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Analyst Views on RCL
Wall Street analysts forecast RCL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RCL is 327.80 USD with a low forecast of 275.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
12 Buy
4 Hold
0 Sell
Strong Buy
Current: 291.600
Low
275.00
Averages
327.80
High
400.00
Current: 291.600
Low
275.00
Averages
327.80
High
400.00
About RCL
Royal Caribbean Cruises Ltd. is a cruise company, which owns and operates three global cruise brands: Royal Caribbean International, Celebrity Cruises and Silversea Cruises. It also has an interest in TUI Cruises GmbH, which operates the German brands TUI Cruises and Hapag-Lloyd Cruises. Its ships offer a selection of worldwide itineraries that call on approximately 1,000 destinations on all seven continents. Royal Caribbean International offers cruises and land destinations that generally feature a casual ambiance, as well as a variety of activities and entertainment venues. Celebrity Cruises offers a range of itineraries to destinations, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, New Zealand, the Panama Canal and South America, with cruise lengths ranging from three to 14 nights. It also offers a range of private land destinations through Perfect Day at CocoCay, includes full water park, zip line course, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Royal Caribbean Cruises Projects Strong Earnings Momentum into 2026
- Earnings Meet Expectations: Royal Caribbean Cruises reported adjusted earnings of $2.80 per share for Q4, aligning with market expectations, primarily driven by a net yield growth of 2.5%, demonstrating the company's resilience in stable growth.
- Net Yield Growth: The company reported a net yield growth of 3.1%, with net per diem growth of 2.9% and an occupancy rate increase of 20 basis points year-on-year to 107.8%, reflecting sustained consumer demand for cruise vacations.
- Future Earnings Guidance: Management guided for adjusted earnings per share of $17.70 to $18.10 in 2026, exceeding the market expectation of $17.65, indicating that net yield growth will outpace cost growth, leading to a 135 basis points year-on-year expansion in adjusted EBITDA margin to 40.5%.
- Analyst Rating Upgrade: JPMorgan analyst Matthew Boss reiterated an Overweight rating on Royal Caribbean Cruises, raising the price target from $357 to $368, reflecting confidence in the company's future growth potential.
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Celebrity River Cruises Expands Fleet to 20 Ships by 2031
- Fleet Expansion Plan: Celebrity River Cruises has announced a commitment to expand its fleet to 20 new ships by 2031, marking a significant ambition in the European river cruise market that is expected to enhance market share and customer experience.
- 2028 Itineraries Open: The 2028 season is now open for booking, featuring over 160 sailings with an 80% increase in destinations compared to 2027, which is likely to attract more travelers and enhance brand visibility.
- Surge in Customer Demand: The inaugural 2027 season sold out in under six minutes, demonstrating strong customer demand for Celebrity River Cruises, prompting the company to accelerate its expansion to meet market needs.
- Unique Experience Offerings: The new itineraries include 24 new ports and diverse themed cruises, such as Dutch Tulip Season and Christmas Market cruises, aimed at providing travelers with unique experiences and further solidifying the brand's market position.
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