Driven by sustained demand strength, improved pricing power, and positive yield momentum—offset by some near-term caution after a broad sector rally—Royal Caribbean Cruises’ consensus analyst price target has been raised materially from $265.37 to $306.43.
Analyst Commentary
- Bullish analysts highlight strong forward demand and improved pricing power, driving upward EPS estimates for the long term.
- Incremental optionality from new land-based projects is seen as a potential catalyst for valuation expansion.
- Upward price targets are supported by yield estimates moving higher, reinforced by foreign exchange tailwinds and resilience in recent sector performance.
- Sector web traffic and pricing data indicate sequential improvement and stability, with most cruise capacity booked through 2025, reinforcing pricing discipline.
- Some analysts caution about a less-than-ideal tactical setup due to a sector-wide rally and anticipate an uneven quarterly cadence in H2, prompting a nuanced near-term outlook.
What's in the News
- Royal Caribbean completed construction and took delivery of Star of the Seas, its next Icon Class ship, which will debut in August from Port Canaveral and features advanced amenities, entertainment, and sustainability initiatives including LNG propulsion and waste heat recovery.
- Star of the Seas will offer innovative dining options and entertainment experiences, including Broadway’s “Back to the Future: The Musical,” multiple signature shows, and a variety of themed eateries and nightlife experiences.
- Multiple Royal Caribbean securities were dropped from several Russell Value indexes, including the Russell 1000, 3000, Midcap, and 3000E Value benchmarks and indices.
- The company repurchased 1,008,055 shares (0.37% of outstanding) for $229.8 million, completing its announced buyback program.
Valuation Changes
Summary of Valuation Changes for Royal Caribbean Cruises
- The Consensus Analyst Price Target has significantly risen from $265.37 to $306.43.
- The Future P/E for Royal Caribbean Cruises has significantly risen from 18.91x to 21.74x.
- The Discount Rate for Royal Caribbean Cruises has risen slightly from 8.22% to 8.41%.
Disclaimer
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