Royal Caribbean Cruises Ltd. Yearly Results: Here's What Analysts Are Forecasting For Next Year

Royal Caribbean Cruises Ltd. (NYSE:RCL) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of US$11b and statutory earnings per share of US$8.95. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

Check out our latest analysis for Royal Caribbean Cruises

After the latest results, the 17 analysts covering Royal Caribbean Cruises are now predicting revenues of US$11.8b in 2020. If met, this would reflect an okay 7.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to swell 15% to US$10.31. Yet prior to the latest earnings, analysts had been forecasting revenues of US$11.8b and earnings per share (EPS) of US$10.49 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$144, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Royal Caribbean Cruises analyst has a price target of US$165 per share, while the most pessimistic values it at US$122. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Royal Caribbean Cruises's past performance and to peers in the same market. It's clear from the latest estimates that Royal Caribbean Cruises's rate of growth is expected to accelerate meaningfully, with forecast 7.3% revenue growth noticeably faster than its historical growth of 5.7%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Royal Caribbean Cruises is expected to grow at about the same rate as the wider market.

The Bottom Line

The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target held steady at US$144, with the latest estimates not enough to have an impact on analysts' estimated valuations.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Royal Caribbean Cruises analysts - going out to 2023, and you can see them free on our platform here.

You can also see whether Royal Caribbean Cruises is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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