Earnings Momentum Will Recover As New Vessel Deliveries Accelerate Through 2028

Royal Caribbean Cruises' analyst price target has shifted downward by $11.78 to $344.09, as analysts cite conservative earnings guidance, softer-than-expected revenue yield trends, and mixed forward booking indicators.

Analyst Commentary

Recent analyst coverage of Royal Caribbean Cruises highlights both confidence in the company’s execution and caution around its future earnings trajectory. After the latest quarterly results, multiple price targets were adjusted downward, reflecting evolving expectations for yield growth, cost management, and booking trends.

• Bullish analysts believe Royal Caribbean’s industry-leading hardware and management team can continue to drive revenue yield outperformance compared to peers.
• Despite conservative 2026 guidance, there is broad expectation of significant EPS growth through 2028 as capacity additions and strong operations take effect.
• Long-term fundamentals, including a track record of low- to mid-single digit yield growth and contained cost increases, are viewed as reasonable and supportive of current valuations.
• The post-earnings share price decline is seen by some as a buying opportunity for investors, given the potential for guidance to be revised upward if demand and yields stabilize.

• Bearish analysts point to softer-than-expected near-term revenue yield trends, suggesting a possible deceleration in momentum for the upcoming quarters.
• Some are cautious about booking indicators, describing them as mixed and signaling less robust forward visibility than earlier in the year.
• Recent EPS outlooks for 2026 came in below consensus expectations, fueling concerns around the achievability of current growth targets.
• There is a call for greater clarity on future yield performance before taking a more constructive stance on the stock’s valuation or longer-term potential.

What's in the News

• Stifel analyst reduced Royal Caribbean's price target to $400 from $420 but maintained a Buy rating. The analyst viewed the recent selloff as a buying opportunity and called initial 2026 EPS guidance "very conservative" (Stifel analyst note).
• The company completed the repurchase of 2,308,055 shares, totaling $655 million, under its ongoing buyback program announced in February 2025 (Company filing).
• Royal Caribbean reported a third quarter load factor of 112% and carried 2.47 million passengers, both up from the previous year. Similar growth was reported for the first nine months of 2025 (Operating results announcement).
• The Board declared a $1.00 per share quarterly dividend, payable in October 2025 (Company press release).
• Royal Caribbean signed a long-term shipbuilding agreement with Meyer Turku, securing rights to build new vessels through the next decade. The agreement includes the newly confirmed Icon 5 ship for delivery in 2028 (Company announcement).

Valuation Changes

• Fair Value Estimate has decreased to $344.09 from $355.87, reflecting a more conservative outlook.
• Discount Rate has risen slightly, moving from 8.97% to 8.98%. This suggests a marginally higher perceived risk.
• Revenue Growth projection has improved from 9.24% to 9.42%. This signals somewhat stronger expected top-line expansion.
• Net Profit Margin expectation edged up from 26.24% to 26.39%. This indicates a minor boost in operating profitability forecasts.
• Future P/E Ratio has fallen to 20.84x from 21.94x. This points to a slight contraction in valuation multiples based on forward earnings.