Royal Caribbean Cruises (NYSE:RCL) Outperforms With 11% Gain Over Last Week

Royal Caribbean Cruises (NYSE:RCL) experienced a notable price movement last week with a 11% rise, amidst a backdrop of mixed market performances. While the S&P 500 and Nasdaq Composite saw declines, the Dow Jones Industrial Average remained relatively stable. Despite broader concerns about economic conditions, including potential tariffs and a recession outlook, Royal Caribbean managed to outperform. The broader market saw a rise of nearly 3% over the period. This increase in Royal Caribbean's share price may correlate with investor confidence in the company's ability to navigate these economic uncertainties, contrasting with downturns in tech stocks during the same timeframe.

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The last five years have seen Royal Caribbean Cruises delivering a very large total shareholder return of 605.19%, significantly outpacing the broader market. Recent earnings reports have highlighted considerable growth, with Q4 2024 revenue reaching $3.76 billion, up from the previous year's $3.33 billion. These positive financials are bolstered by initiatives like dividend increases, including a quarterly dividend declared in February 2025 of US$0.75 per share, reflecting the company's strong profitability and willingness to return value to shareholders.

Royal Caribbean's expansion efforts have been pivotal, such as the order of a sixth Edge Series ship for Celebrity Cruises, enhancing its product offerings. The company also announced substantial plans like Perfect Day Mexico, aimed at increasing their unique Caribbean destinations. In addition, the launch of a US$1 billion share buyback program in February 2025 indicates confidence in future performance, supporting the robust stock performance over this period.

In light of our recent valuation report, it seems possible that Royal Caribbean Cruises is trading behind its estimated value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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