Royal Caribbean (RCL) closed at $275.76 in the latest trading session, marking a -1.25% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.62% for the day. Elsewhere, the Dow gained 0.58%, while the tech-heavy Nasdaq added 0.83%.
Heading into today, shares of the cruise operator had lost 2.53% over the past month, lagging the Consumer Discretionary sector's loss of 1.73% and the S&P 500's gain of 0.8%.
The upcoming earnings release of Royal Caribbean will be of great interest to investors. The company's upcoming EPS is projected at $3.2, signifying a 18.08% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $4.44 billion, showing a 11% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $17.96 per share and a revenue of $19.76 billion, signifying shifts of +14.83% and +10.16%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for Royal Caribbean. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.71% downward. Royal Caribbean is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Royal Caribbean is currently trading at a Forward P/E ratio of 15.55. This expresses a discount compared to the average Forward P/E of 16.7 of its industry.
One should further note that RCL currently holds a PEG ratio of 0.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Leisure and Recreation Services industry had an average PEG ratio of 1.38.
The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 94, this industry ranks in the top 39% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).