Jim Cramer on Royal Caribbean: "Expectations Simply Got Too High"

Royal Caribbean Cruises Ltd. (NYSE:RCL) is one of the stocks Jim Cramer recently talked about. Cramer discussed the company’s earnings and the market reaction to it during the episode. He said:

“Today’s earnings made me feel like we’d forgotten the impact of all the tariff turmoil on the consumer. Some of the decline, I think, was an overreaction. Royal Caribbean went down on its outlook. But I gotta tell you, I checked that one out. I think the expectations simply got too high. People got used to this cruise line just crushing the high end of the estimates. Didn’t happen.”

Royal Caribbean (NYSE:RCL) is a cruise operator that provides diverse itineraries through multiple brands, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. In a March episode, Cramer mentioned the company and said:

“What else in travel’s worth taking a look at?… It’s tough for me to square the heinous action with what we just heard from Jason Liberty, the CEO of Royal Caribbean. When he came on the show last week, first, Liberty confirmed that its… consumers perceive Royal Caribbean cruises as a better value than a land-based vacation, reinforcing my view the cruise lines can still do fine even in a softer economy. Second, he cited its own bookings and on-ship spending data from recent voyages saying matter-of-factly, ‘that cash register continues to ring and be consistent.’

Finally, looking at longer term, Liberty noted that, this is so important, understand this major, major ratio, the new supply, meaning new cruise ships, should continue to be limited for the next few years, which is positive for the entire industry’s pricing power. At one point you see the pricing power go down when they have a lot of ships coming. Plus, altogether, I feel really okay about the cruise lines, Royal Caribbean in particular. This had a 25% pullback from its recent high, stock now sells for a very… undermining 14 times earnings. I like that.”

Since the above comment was made, Royal Caribbean (NYSE:RCL) stock is up over 61%.

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READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.