DB:RC8

Stock Analysis Report

Royal Caribbean Cruises

Executive Summary

Royal Caribbean Cruises Ltd. operates as a cruise company.

Rewards

PE ratio (12.4x) is below the German market (20.9x)

Earnings are forecast to grow 10.42% per year

Earnings grew by 3.7% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Accor

ENXTPA:AC

Share Price & News

How has Royal Caribbean Cruises's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RC8 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.0%

RC8

-5.0%

DE Hospitality

0.2%

DE Market


1 Year Return

-3.6%

RC8

3.5%

DE Hospitality

14.4%

DE Market

Return vs Industry: RC8 underperformed the German Hospitality industry which returned 2.7% over the past year.

Return vs Market: RC8 underperformed the German Market which returned 14.1% over the past year.


Shareholder returns

RC8IndustryMarket
7 Day-3.0%-5.0%0.2%
30 Day-14.1%-0.3%0.9%
90 Day-3.9%-11.9%4.6%
1 Year-1.2%-3.6%8.0%3.5%17.9%14.4%
3 Year21.5%13.7%-9.2%-21.6%15.7%5.6%
5 Year63.6%47.9%-10.4%-29.3%23.4%6.5%

Price Volatility Vs. Market

How volatile is Royal Caribbean Cruises's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Royal Caribbean Cruises undervalued compared to its fair value and its price relative to the market?

12.37x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RC8 (€102.78) is trading above our estimate of fair value (€44.16)

Significantly Below Fair Value: RC8 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RC8 is good value based on its PE Ratio (12.4x) compared to the Hospitality industry average (25.4x).

PE vs Market: RC8 is good value based on its PE Ratio (12.4x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: RC8 is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: RC8 is good value based on its PB Ratio (1.9x) compared to the DE Hospitality industry average (2.3x).


Next Steps

Future Growth

How is Royal Caribbean Cruises forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

10.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RC8's forecast earnings growth (10.4% per year) is above the savings rate (-0.4%).

Earnings vs Market: RC8's earnings (10.4% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: RC8's earnings are forecast to grow, but not significantly.

Revenue vs Market: RC8's revenue (8% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: RC8's revenue (8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RC8's Return on Equity is forecast to be high in 3 years time (22%)


Next Steps

Past Performance

How has Royal Caribbean Cruises performed over the past 5 years?

21.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RC8 has high quality earnings.

Growing Profit Margin: RC8's current net profit margins (17.2%) are lower than last year (19.1%).


Past Earnings Growth Analysis

Earnings Trend: RC8's earnings have grown significantly by 21.9% per year over the past 5 years.

Accelerating Growth: RC8's earnings growth over the past year (3.7%) is below its 5-year average (21.9% per year).

Earnings vs Industry: RC8 earnings growth over the past year (3.7%) exceeded the Hospitality industry -36.8%.


Return on Equity

High ROE: RC8's Return on Equity (15%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Royal Caribbean Cruises's financial position?


Financial Position Analysis

Short Term Liabilities: RC8's short term assets ($1.2B) do not cover its short term liabilities ($8.0B).

Long Term Liabilities: RC8's short term assets ($1.2B) do not cover its long term liabilities ($9.6B).


Debt to Equity History and Analysis

Debt Level: RC8's debt to equity ratio (86.7%) is considered high.

Reducing Debt: RC8's debt to equity ratio has reduced from 102.1% to 86.7% over the past 5 years.

Debt Coverage: RC8's debt is well covered by operating cash flow (33.7%).

Interest Coverage: RC8's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet

Inventory Level: RC8 has a high level of physical assets or inventory.

Debt Coverage by Assets: RC8's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Royal Caribbean Cruises's current dividend yield, its reliability and sustainability?

2.81%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.3%markettop25%3.6%industryaverage5.3%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: RC8's dividend (2.8%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: RC8's dividend (2.8%) is low compared to the top 25% of dividend payers in the German market (3.57%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RC8 has been paying a dividend for less than 10 years.

Growing Dividend: RC8's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33%), RC8's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RC8's dividends in 3 years are forecast to be well covered by earnings (26.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.8yrs

Average management tenure


CEO

Richard Fain (71yo)

31.8yrs

Tenure

US$12,422,715

Compensation

Mr. Richard D. Fain has been the Chief Executive Officer at Royal Caribbean Cruises Ltd. since April 1988. Mr. Fain serves as the Chief Executive Officer of Azamara Club Cruises, Inc. Prior to Royal Caribb ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD12.42M) is above average for companies of similar size in the German market ($USD4.36M).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Fain
Chairman & CEO31.8yrsUS$12.42m0.47% $101.0m
Jason Liberty
Executive VP & CFO6.8yrsUS$4.75m0.0034% $730.2k
Harri Kulovaara
Executive Vice President of Maritime & Newbuilding15.1yrsUS$3.84m0.0028% $601.4k
Lisa Lutoff-Perlo
President & CEO of Celebrity Cruises5.2yrsUS$3.84m0.015% $3.3m
Michael Bayley
President & CEO of Royal Caribbean International5.2yrsUS$5.72m0.0055% $1.2m
Henry Pujol
Senior VP6.8yrsno data0.018% $3.8m
Martha Poulter
Senior VP & Chief Information Officer2.2yrsno datano data
Ian Bailey
Vice President of Investor Relations11.3yrsno datano data
Bradley Stein
Senior VP13.6yrsno data0.0045% $962.2k
Laura Miller
Chief Human Resources Officer & Senior VP2.1yrsno datano data

6.8yrs

Average Tenure

60yo

Average Age

Experienced Management: RC8's management team is seasoned and experienced (6.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Fain
Chairman & CEO31.8yrsUS$12.42m0.47% $101.0m
William Reilly
Independent Director22.1yrsUS$266.70k0.0075% $1.6m
William Kimsey
Lead Director6.4yrsUS$383.13k0.0093% $2.0m
Donald Thompson
Independent Director4.8yrsUS$318.95k0.0027% $584.2k
Ann Moore
Independent Director7.8yrsUS$266.70k0.0072% $1.6m
John Brock
Independent Director6yrsUS$284.99k0.0064% $1.4m
Thomas Pritzker
Independent Director21yrsUS$266.70k0.39% $84.0m
Eyal Ofer
Independent Director24.8yrsUS$271.71k0.014% $3.0m
Vagn Sørensen
Independent Director8.6yrsUS$294.20k0.010% $2.2m
Arne Wilhelmsen
Independent Director16.8yrsUS$264.20k0.0042% $906.4k

12.7yrs

Average Tenure

68.5yo

Average Age

Experienced Board: RC8's board of directors are seasoned and experienced ( 12.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RC8 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Royal Caribbean Cruises Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Royal Caribbean Cruises Ltd.
  • Ticker: RC8
  • Exchange: DB
  • Founded: 1968
  • Industry: Hotels, Resorts and Cruise Lines
  • Sector: Consumer Services
  • Market Cap: US$23.179b
  • Listing Market Cap: US$21.478b
  • Shares outstanding: 208.80m
  • Website: https://www.rclinvestor.com

Number of Employees


Location

  • Royal Caribbean Cruises Ltd.
  • 1050 Caribbean Way
  • Miami
  • Florida
  • 33132
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RCLNYSE (New York Stock Exchange)YesCommon SharesUSUSDApr 1993
RC8DB (Deutsche Boerse AG)YesCommon SharesDEEURApr 1993
0I1WLSE (London Stock Exchange)YesCommon SharesGBUSDApr 1993
RCL *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNApr 1993

Biography

Royal Caribbean Cruises Ltd. operates as a cruise company. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, and Silversea Cruises brands. The Royal Caribbean International brand provides itineraries to destinations worldwide, including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal, and New Zealand with cruise lengths that range from 2 to 23 nights. The Celebrity Cruises brand offers itineraries to destinations, such as Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, India, New Zealand, the Panama Canal, and South America with cruise lengths ranging from 2 to 19 nights. The Azamara Club Cruises brand offers cruise itineraries ranging from 4 to 21 nights to destinations, including Asia, Australia/New Zealand, Northern and Western Europe, the Mediterranean, Cuba, and South America. The Silversea Cruises brand provides itineraries to destinations, including the Galapagos Islands, Antarctica, and the Arctic. As of March 31, 2019, the company operated 61 ships and had 15 ships on order. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 20:31
End of Day Share Price2020/02/20 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.