Royal Caribbean (RCL) closed the most recent trading day at $276.34, moving +1.82% from the previous trading session. This move outpaced the S&P 500’s daily gain of 1.03%. On the other hand, the Dow registered a gain of 1.05%, and the technology-centric Nasdaq increased by 1.2%.
Shares of the cruise operator witnessed a gain of 16.56% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 7.46% and the S&P 500’s gain of 5.27%.
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The investment community will be paying close attention to the earnings performance of Royal Caribbean in its upcoming release. The company is predicted to post an EPS of $4.04, indicating a 25.86% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $4.54 billion, showing a 10.44% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $15.42 per share and a revenue of $18.03 billion, signifying shifts of +30.68% and +9.35%, respectively, from the last year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Royal Caribbean. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.64% higher. As of now, Royal Caribbean holds a Zacks Rank of #3 (Hold).
Digging into valuation, Royal Caribbean currently has a Forward P/E ratio of 17.61. This signifies a discount in comparison to the average Forward P/E of 19.77 for its industry.
Investors should also note that RCL has a PEG ratio of 0.81 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. Leisure and Recreation Services stocks are, on average, holding a PEG ratio of 1.35 based on yesterday’s closing prices.
