Royal Caribbean Cruises Ltd. RCL is scheduled to release second-quarter 2026 results on July 28.
The Zacks Consensus Estimate for RCL’s second-quarter earnings per share (EPS) is pegged at $3.97, down 9.4% from the year-ago quarter. The consensus mark for earnings has decreased in the past seven days.
RCL’s Earnings Estimate Trend
The consensus mark for second-quarter revenues is pegged at $4.81 billion, indicating growth of 6% from the year-ago quarter’s reported figure.
Royal Caribbean has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 5.1%.
RCL Earnings Surprise History
What the Zacks Model Unveils for RCL
Our proven model predicts an earnings beat for Royal Caribbean for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) for this to happen. This is exactly the case here.
Earnings ESP: RCL has an Earnings ESP of +0.70%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean Cruises Ltd. Price and EPS Surprise
Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. Quote
Factors Likely to Shape Royal Caribbean’s Q2 Results
Royal Caribbean’s second-quarter top line is likely to have been driven by sustained demand for cruise vacations, backed by another record Wave booking season and consumers’ continued preference for travel experiences. Strong booking volumes across its portfolio, onboard spending that remained above prior-year levels and a healthy booking position at record pricing are expected to have supported revenue growth. The company also delivered more than 2.5 million vacations during the quarter, while strong guest satisfaction is likely to have reinforced its pricing power.
Higher passenger volumes and favorable pricing trends might have further boosted revenue performance. Management expects a 12% year-over-year increase in vacations delivered, supported by a rise in repeat cruisers and younger travelers, particularly millennials. Net yields are expected to grow 2%, surpassing guidance, reflecting strength across key itineraries and improved gross margins. Increased pre-cruise bookings and higher guest spending per night are also likely to have contributed to the top line.
The company’s expanding digital capabilities and loyalty initiatives are also expected to have aided revenue growth. Digital bookings have more than doubled since 2019, with mobile app adoption exceeding 90%, encouraging guests to book experiences before boarding. Cross-brand bookings continued to increase following loyalty enhancements, while repeat customers accounted for a larger share of guests and typically spent more than first-time cruisers. Strong demand for Icon-class ships and new destination experiences is also likely to have supported revenues.
Royal Caribbean’s bottom line is likely to have faced pressure from elevated fuel costs linked to geopolitical tensions. Higher crew travel expenses caused by air travel disruptions, dry dock-related costs, lower earnings contributions from TUI Cruises and softer demand for select Mediterranean and West Coast Mexico itineraries might also have weighed on profitability, despite continued cost discipline.
RCL’s Stock Price Performance & Valuation
Royal Caribbean’s shares have gained 9.5% in the past three months, outperforming the Zacks Leisure and Recreation Services industry and the S&P 500, as shown in the chart below.
RCL Three-Month Price Performance
Image Source: Zacks Investment Research
The company’s peers, including OneSpaWorld Holdings Limited OSW, Norwegian Cruise Line Holdings Ltd. NCLH and Carnival Corporation Ltd. CCL, gained 8.2%, 2.9% and declined 5.6%, respectively, in the same time period.
From a valuation perspective, RCL stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 15.15, below the industry average of 16.17.
RCL’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Other industry players, such as Carnival, OneSpaWorld Holdings and Norwegian Cruise, have a P/E of 10.27, 20.55 and 9.83, respectively.
Conclusion
Royal Caribbean continues to benefit from resilient travel demand, premium vacation offerings, healthy onboard spending and successful digital and loyalty initiatives, all of which support its long-term growth outlook. The stock also trades at a reasonable valuation relative to the industry, making its longer-term prospects attractive.
However, near-term profitability may remain under pressure from higher fuel costs, elevated operating expenses and lingering geopolitical disruptions affecting certain itineraries. With the stock already outperforming the broader market and earnings expectations appearing largely reflected in the share price, investors may be better served by holding the stock ahead of the upcoming results rather than adding fresh positions. Waiting for management's commentary on booking trends, margins and the outlook for the remainder of the year could provide a more favorable entry point.
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Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report
Carnival Corporation (CCL): Free Stock Analysis Report
Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report
OneSpaWorld Holdings Limited (OSW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).