Update shared on 27 Nov 2025
Fair value Decreased 0.21%Royal Caribbean’s analyst price target has been modestly reduced from $337 to $333, as analysts cite more cautious outlooks on future yield growth and mixed booking trends. This comes despite continued recognition of the company’s long-term strengths.
Analyst Commentary
Recent price target adjustments and research notes for Royal Caribbean Cruises highlight a split in sentiment within the analyst community following the company's latest results and outlook. While several long-term positives are recognized, there is also a distinct emphasis on near-term uncertainties and mixed signals in both demand and financial projections.
Bullish Takeaways- Bullish analysts point to Royal Caribbean's industry-leading management team and strong operational execution, which are expected to drive significant earnings growth through 2028.
- The company's superior cruise hardware and offerings are seen as engines for yield outperformance relative to peers.
- Some view the recent stock selloff as an attractive buying opportunity, given the resetting of expectations and potentially conservative initial guidance for 2026.
- Long-term valuation thesis remains supported by a track record of low to mid-single digit yield growth coupled with disciplined cost management, supporting consensus estimates for improving EPS in coming years.
- Bearish analysts report concerns over a sharper than expected slowdown in revenue yields, reflected in modest EPS revisions downward post Q3 results.
- Booking and pricing data suggest neither clear outperformance nor strong positive trends, creating uncertainty about near-term demand strength and pricing power.
- Some caution that initial 2026 EPS guidance is below previous consensus and are waiting for greater visibility on yield recovery before turning more constructive.
- Despite delivering cost-driven beats in recent quarters, the company's outlook for the next several years has led to more conservative model adjustments among certain analysts, weighing on valuations.
What's in the News
- Stifel analyst lowered Royal Caribbean's price target to $400 from $420, citing a perceived market overreaction and stating 2026 earnings guidance appears conservative, which could create potential upside to consensus (Stifel periodical).
- Royal Caribbean announced an expanded lineup of Caribbean vacations for 2027-28, including year-round getaways, the return to Samana in the Dominican Republic, and new beach club destinations in The Bahamas and Mexico (Key Developments).
- Together with Meyer Turku, Royal Caribbean entered a decade-long agreement to secure shipbuilding rights and confirmed an order for Icon 5 to be delivered in 2028, with options for additional Icon Class ships beyond 2028 (Key Developments).
- Royal Caribbean completed a share buyback of 1,274,060 shares, totaling $414.13 million, reflecting ongoing capital returns to shareholders (Key Developments).
- The company provided updated 2025 financial guidance, projecting fourth quarter net yields between 2.6% and 3.1% and full-year net yields between 3.5% and 4.0% (Key Developments).
Valuation Changes
- Fair Value Estimate has decreased modestly, moving from $336.78 to $336.08 per share.
- Discount Rate has edged down slightly, from 9.01% to 8.98%.
- Revenue Growth Projection has risen fractionally, from 9.32% to 9.33%.
- Net Profit Margin has decreased marginally, from 25.93% to 25.92%.
- Future Price-to-Earnings (P/E) Ratio has declined moderately, from 20.98x to 20.84x.
Disclaimer
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