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Royal Caribbean (RCL) Rises As Market Takes a Dip: Key Facts

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Royal Caribbean (RCL - Free Report) closed the latest trading day at $163.18, indicating a +0.31% change from the previous session's end. This move outpaced the S&P 500's daily loss of 0.88%. Elsewhere, the Dow saw an upswing of 0.08%, while the tech-heavy Nasdaq depreciated by 1.95%.

The cruise operator's shares have seen an increase of 3.3% over the last month, surpassing the Consumer Discretionary sector's loss of 2.04% and falling behind the S&P 500's gain of 5.11%.

Market participants will be closely following the financial results of Royal Caribbean in its upcoming release. In that report, analysts expect Royal Caribbean to post earnings of $2.76 per share. This would mark year-over-year growth of 51.65%. Simultaneously, our latest consensus estimate expects the revenue to be $4 billion, showing a 13.43% escalation compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $11.10 per share and a revenue of $16.24 billion, representing changes of +63.96% and +16.85%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates 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. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 0.07% rise in the Zacks Consensus EPS estimate. Right now, Royal Caribbean possesses a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Royal Caribbean has a Forward P/E ratio of 14.66 right now. For comparison, its industry has an average Forward P/E of 16.8, which means Royal Caribbean is trading at a discount to the group.

One should further note that RCL currently holds a PEG ratio of 0.49. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Leisure and Recreation Services industry had an average PEG ratio of 1.21.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 169, placing it within the bottom 33% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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