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Royal Caribbean (RCL) Stock Sinks As Market Gains: What You Should Know

Royal Caribbean (RCL) closed at $61.35 in the latest trading session, marking a -0.86% move from the prior day. This move lagged the S&P 500's daily gain of 0.89%. Elsewhere, the Dow gained 1.2%, while the tech-heavy Nasdaq lost 0.68%.

Prior to today's trading, shares of the cruise operator had lost 15.27% over the past month. This has lagged the Consumer Discretionary sector's loss of 7.98% and the S&P 500's loss of 3.9% in that time.

Royal Caribbean will be looking to display strength as it nears its next earnings release. In that report, analysts expect Royal Caribbean to post earnings of -$0.73 per share. This would mark year-over-year growth of 84.03%. Our most recent consensus estimate is calling for quarterly revenue of $2.82 billion, up 166.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.30 per share and revenue of $12.88 billion. These totals would mark changes of +144% and +45.72%, respectively, from last year.

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Investors should also note any recent changes to analyst estimates for Royal Caribbean. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Royal Caribbean is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Royal Caribbean is currently trading at a Forward P/E ratio of 18.74. Its industry sports an average Forward P/E of 25.38, so we one might conclude that Royal Caribbean is trading at a discount comparatively.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 63, which puts it in the top 25% of all 250+ industries.

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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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

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Zacks Investment Research