Royal Caribbean Cruises Ltd. RCL delivered strong third-quarter 2026 results, reflecting robust booking momentum, resilient consumer demand and disciplined execution. The company’s performance was supported by better-than-expected close-in demand in Europe and the Caribbean, along with solid onboard spending. Looking ahead, Royal Caribbean remains optimistic about the growth prospects, with bookings for 2027 sailings accelerating and management reaffirming its target of achieving adjusted earnings per share of around $20 in 2027.
Strong Booking Momentum Supports Growth Prospects
Royal Caribbean continues to witness strong demand for cruise vacations, with booking activity gaining momentum across its brands. During the third-quarter earnings call, management stated that booking volumes across major channels had increased in the mid-teens year over year since the previous earnings call. Bookings for 2027 sailings were up in the high teens, highlighting growing demand for future cruise vacations.
The company’s booked position for both 2026 and 2027 is ahead of the prior-year levels at record rates. This provides a strong foundation for future revenue and earnings growth, as the company benefits from reservations and favorable pricing trends. Management also indicated that customers are willing to pay higher prices for future sailings, reflecting the perceived value of cruise vacations.
Royal Caribbean’s ability to attract both repeat and new customers further strengthens its demand outlook. Nearly half of its guests in 2026 were repeat customers, while the remaining travelers were new to its brands. The company is also seeing guests return more frequently, with the average time between cruises continuing to decrease. Royal Caribbean’s vacation offerings, which bundle accommodations, meals, entertainment and multiple destinations, are helping it remain attractive to consumers seeking value.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote
Royal Caribbean Targets $20 EPS in 2027
Royal Caribbean remains on track to achieve its Perfecta program target of delivering 20% adjusted EPS compound annual growth from 2024 through 2027, translating into a $20-plus adjusted EPS target in 2027. Management stated that the underlying business is performing well ahead of its initial expectations.
The company expects to achieve this target based on the current forward fuel price curve, despite higher fuel costs. Management noted that at the fuel prices prevailing when the Perfecta program was announced, the company would have exceeded its 2027 earnings target by approximately $1 per share.
Royal Caribbean’s earnings growth strategy is based on moderate capacity expansion, yield growth and disciplined cost management. Capacity is expected to increase approximately 4.5% in 2027, while the company continues to benefit from strong bookings, pricing and operational efficiencies. The launch of new ships and the expansion of the vacation ecosystem are also expected to support its longer-term growth.
The strong booking trends and continued progress toward its $20 adjusted EPS target underscore Royal Caribbean’s confidence in the growth trajectory. (Read more: RCL Q3 Earnings Beat Estimates on Strong Demand, Lower Costs)
RCL currently carries a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks from the Zacks Consumer-Discretionary sector are Cinemark Holdings, Inc. CNK, AMC Entertainment Holdings, Inc. AMC and Amer Sports, Inc. AS.
Cinemark presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Cinemark delivered a trailing four-quarter earnings surprise of 10.9%, on average. The stock has surged 68.6% in the year-to-date period. The Zacks Consensus Estimate for CNK’s 2026 sales and EPS implies growth of 17.7% and 155.8%, respectively, from the year-ago levels.
AMC Entertainment presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 321.7%, on average. The stock has rallied 96.2% in the year-to-date period.
The Zacks Consensus Estimate for AMC’s 2026 sales and EPS indicates an increase of 18.8% and 91.7%, respectively, from the year-ago levels.
Amer Sports currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings beat of 42.4%, on average. The stock has declined 21.2% in the year-to-date period.
The Zacks Consensus Estimate for AS’s 2026 sales and EPS indicates growth of 25.1% and 34%, respectively, from the year-ago period’s levels.
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Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).