Royal Caribbean (RCL – Free Report) closed the most recent trading day at $212.02, moving +1.98% from the previous trading session. The stock’s performance was behind the S&P 500’s daily gain of 2.13%. Meanwhile, the Dow gained 1.65%, and the Nasdaq, a tech-heavy index, added 2.61%.
The cruise operator’s stock has dropped by 20.07% in the past month, falling short of the Consumer Discretionary sector’s loss of 12.53% and the S&P 500’s loss of 9.57%.
The investment community will be paying close attention to the earnings performance of Royal Caribbean in its upcoming release. On that day, Royal Caribbean is projected to report earnings of $2.49 per share, which would represent year-over-year growth of 40.68%. Meanwhile, the latest consensus estimate predicts the revenue to be $4.01 billion, indicating a 7.55% increase compared to the same quarter of the previous year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $14.90 per share and revenue of $17.98 billion, indicating changes of +26.27% and +9.06%, respectively, compared to the previous year.
Any recent changes to analyst estimates for Royal Caribbean should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.16% increase. Royal Caribbean presently features a Zacks Rank of #2 (Buy).
Looking at its valuation, Royal Caribbean is holding a Forward P/E ratio of 13.95. Its industry sports an average Forward P/E of 18.57, so one might conclude that Royal Caribbean is trading at a discount comparatively.
It’s also important to note that RCL currently trades at a PEG ratio of 0.71. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Leisure and Recreation Services industry had an average PEG ratio of 1.12 as trading concluded yesterday.
The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 71, positioning it in the top 29% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow RCL in the coming trading sessions, be sure to utilize Zacks.com.
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