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Here's Why Royal Caribbean (RCL) is a Strong Value Stock

Zacks Equity Research
·2-min read

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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Royal Caribbean (RCL)

Based in Miami and incorporated in 1985, Royal Caribbean Cruises is a cruise company. It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, it has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises.

RCL sits at a Zacks Rank #1 (Strong Buy), holds a Value Style Score of B, and has a VGM Score of B. Compared to the Leisure and Recreation Services industry's P/E of 17.2X, shares of Royal Caribbean are trading at a forward P/E of 14X. RCL also has a PEG Ratio of 0.5, a Price/Cash Flow ratio of 10.6X, and a Price/Sales ratio of 2.6X.

Many value investors pay close attention to a company's earnings as well. For RCL, eight analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.86 to $10.01 per share for 2024. Per share RCL boasts an average earnings surprise of 26.4%.

RCL should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

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Zacks Investment Research