In the latest trading session, Royal Caribbean (RCL) closed at $296.30, marking a -3.26% move from the previous day. Meanwhile, the Dow experienced a rise of 1.14%, and the technology-dominated Nasdaq saw a decrease of 0.8%.
Coming into today, shares of the cruise operator had gained 6.94% in the past month. In that same time, the Consumer Discretionary sector lost 1.82%, while the S&P 500 lost 1.43%.
Market participants will be closely following the financial results of Royal Caribbean in its upcoming release. The company is expected to report EPS of $3.91, down 10.73% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.81 billion, up 6.04% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $17.27 per share and revenue of $19.63 billion, indicating changes of +10.42% and +9.44%, respectively, compared to the previous year.
It is also important to note the recent changes to analyst estimates for Royal Caribbean. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. At present, Royal Caribbean boasts a Zacks Rank of #4 (Sell).
In the context of valuation, Royal Caribbean is at present trading with a Forward P/E ratio of 17.74. This denotes a premium relative to the industry average Forward P/E of 17.35.
Meanwhile, RCL's PEG ratio is currently 1.07. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Leisure and Recreation Services industry was having an average PEG ratio of 1.48.
The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 22% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).