Royal Caribbean's Optimistic 2025 Earnings Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Earnings Guidance Exceeds Expectations: Royal Caribbean anticipates adjusted earnings per share for 2026 to range between $17.70 and $18.10, reflecting a 23% CAGR that surpasses the consensus estimate of $17.66, indicating strong profitability and market confidence.
- Robust Financial Performance: The company reported an adjusted EPS of $2.80 for the fourth quarter, a 72% increase year-over-year and in line with expectations, while adjusted EBITDA rose 34% to $1.48 billion, driving the EBITDA margin up by 560 basis points to 34.8%.
- Growth Strategy Implementation: To achieve its Perfecta Program, Royal Caribbean has invested in vacation experiences, new ships, the expansion of Celebrity river cruises, and five new destinations by 2028, aiming for a 20% EPS CAGR over the next three years.
- Positive Market Reaction: Shares of Royal Caribbean are trading nearly 7% higher in premarket trading, reflecting investor optimism regarding the company's financial outlook, particularly with expectations of double-digit revenue growth in 2025 and 2026.
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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 to Announce Q4 Earnings on January 29
- Earnings Announcement: Royal Caribbean Cruises (RCL) is set to announce its Q4 2023 earnings on January 29 before market open, with consensus EPS estimates at $2.80, reflecting a significant year-over-year increase of 71.8%, indicating strong profitability.
- Revenue Expectations: The anticipated revenue for Q4 is $4.27 billion, representing a 13.6% year-over-year growth, showcasing the company's robust performance in the recovering travel sector despite market challenges.
- Historical Performance: Over the past two years, RCL has exceeded EPS estimates 100% of the time, while only beating revenue estimates 38% of the time, indicating stability in earnings but a need for improvement in revenue growth.
- Revision Trends: In the last three months, there have been no upward revisions for EPS estimates, with 20 downward adjustments, and similarly, revenue estimates saw no upward revisions and 18 downward adjustments, reflecting a cautious market outlook on future performance.
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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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