In the latest close session, Royal Caribbean (RCL) was down 2.88% at $258.08. The stock fell short of the S&P 500, which registered a loss of 1.13% for the day. Meanwhile, the Dow lost 1.79%, and the Nasdaq, a tech-heavy index, lost 1.3%.
Heading into today, shares of the cruise operator had gained 6.25% over the past month, outpacing the Consumer Discretionary sector's gain of 3.54% and the S&P 500's gain of 3.55%.
Market participants will be closely following the financial results of Royal Caribbean in its upcoming release. In that report, analysts expect Royal Caribbean to post earnings of $4.04 per share. This would mark year-over-year growth of 25.86%. Meanwhile, our latest consensus estimate is calling for revenue of $4.54 billion, up 10.44% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $15.42 per share and a revenue of $18.03 billion, demonstrating changes of +30.68% and +9.36%, respectively, from the preceding year.
Investors might also notice recent changes to analyst estimates for Royal Caribbean. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending 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.
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 0.65% upward. Royal Caribbean presently features a Zacks Rank of #3 (Hold).
Looking at valuation, Royal Caribbean is presently trading at a Forward P/E ratio of 17.24. This signifies a discount in comparison to the average Forward P/E of 19.84 for its industry.
Meanwhile, RCL's PEG ratio is currently 0.79. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Leisure and Recreation Services industry was having an average PEG ratio of 1.47.
The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 78, finds itself in the top 32% echelons of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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