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Royal Caribbean Cruises Ltd. (RCL), headquartered in Miami, Florida, is a cruise company. Valued at $41.54 billion by market cap, the company has a fleet of 65 ships traveling to more than 1,000 destinations worldwide. It owns and operates three cruise brands: Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. It is a 50% owner of a joint venture that operates TUI Cruises and Hapag-Lloyd Cruises.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and RCL perfectly fits that description, signifying its substantial size, stability, and dominance in its industry.
The cruise major has fallen marginally from its 52-week high of $161.68, which it hit on Jun. 25. Shares of RCL are up 15.3% over the past three months, outperforming the broader Nasdaq Composite’s ($NASX) 8.9% gains over the same time frame.
Longer term, RCL shares have risen 58.8% over the past year, and in 2024, the stock is up 24.4%. By contrast, the NASX is up 19% on a YTD basis and 31.7% over the past 52 weeks.
The stock has been trading above its 50-day moving average since mid-April and its 200-day moving average since late October 2023.
On Jun. 25, RCL shares closed up more than 3% after rival Carnival Corporation & plc (CCL) reported Q2 revenue of $5.78 billion, beating the consensus estimate of $5.69 billion, and forecasted Q3 adjusted EBITDA of $2.66 billion, better than the consensus estimates of $2.62 billion.
On Jun. 14, RCL shares closed down more than 4% after Bank of America said cruise pricing was “modestly softer” in early June versus May.
RCL’s overall performance can be attributed to its robust Q1 results and optimistic outlook for 2024. Its adjusted EPS was $1.77, beating the consensus estimate of $1.31, and its revenue of $3.73 billion surpassed the Street estimates of $3.68 billion. The company expects adjusted EPS between $2.65 and $2.75 for the current quarter. RCL expects full-year adjusted EPS between $10.70 and $10.90, up from the previous forecast of between $9.90 and $10.10 due to strong demand.
RCL’s latest guidance suggests that adjusted EPS could reach an all-time high in 2024, driven by continued strength in bookings and onboard spending.
Rival Norwegian Cruise Line Holdings Ltd. (NCLH) has underperformed RCL. NCLH stock has declined 5.2% in the past 52 weeks and is down 7.3% on a YTD basis.
With its recent outperformance compared to the NASX, analysts remain optimistic about RCL’s prospects. The stock has a consensus rating of “Strong Buy” from the 17 analysts covering it, and the mean price target of $161.82 is a marginal premium to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
