Royal Caribbean Cruises Ltd. is a global cruise company. It operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, offering a range of itineraries. As of December 31, 2025, it operated 69 ships. The company was founded in 1968 and is headquartered in Miami, Florida.
RCL's profit beat offset by rising costs and fuel headwinds
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Fuel cost headwind Royal Caribbean expects higher fuel prices to cut 2026 earnings by 62 cents per share, with full-year fuel expense around $1.35 billion. Fuel is a major cost, so this directly reduces profit and pressures the stock.
This is a new, specific cost headwind that explains why earnings are under pressure despite revenue growth.
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Q2 beat and raised guidance Royal Caribbean beat second-quarter revenue and earnings estimates and raised its full-year profit forecast to $17.73–$17.87 per share. Strong demand and pricing power support the stock, even as costs rise.
This is the core positive event of the period, showing the company's underlying business remains strong.
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Rising operating costs squeeze earnings Operating expenses jumped 11% due to higher fuel, food, and labor costs, causing adjusted earnings to fall 3.9% year-over-year. This cost pressure is why the stock dropped 5.3% after earnings and remains 20% below its high.
This explains the negative market reaction and the disconnect between revenue growth and profit decline.
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Debt refinancing and long-term growth outlook Royal Caribbean refinanced $1.25 billion in debt at 5.55% and projects $23.4 billion revenue and $6.0 billion earnings by 2029. This supports future growth, though it slightly increases leverage in the near term.
This shows management's confidence and provides a positive long-term counterweight to current cost pressures.
Q3 2026
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Royal Caribbean beats Q2, raises guidance, but cost and Middle East risks weigh
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Q2 beat and raised guidance Royal Caribbean beat second-quarter estimates and raised full-year profit guidance to $17.73–$17.87 per share, citing strong demand, record pricing, and 2.4 million guests.
This is the main positive event that drove the stock this period.
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Long-term growth drivers Long-term growth drivers—5% capacity expansion, private destinations growing from three to eight by 2028, and river cruises—support earnings through 2029, alongside $1.25 billion in debt refinancing.
These initiatives underpin future earnings growth and investor confidence.
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Cost pressures and Middle East disruptions Middle East disruptions trimmed revenue growth guidance to about 9%, and higher fuel prices are expected to cut 2026 earnings by 62 cents per share. Operating expenses jumped 11% on fuel, food, and labor costs, pushing adjusted earnings down 3.9% year-over-year.
These are the key negative factors that pressured the stock and outlook.
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Stock reaction and leverage The stock fell 5.3% post-earnings and remains 20% below its high, with refinancing slightly increasing leverage.
This reflects the market's negative reaction and balance sheet impact.
News & notes movingRCL
United States
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Royal Caribbean Hedges 58% of 2026 Fuel Needs Against $1.34 Billion Expense Outlook
Royal Caribbean Cruises has hedged 58% of its remaining 2026 fuel consumption at significantly below-market rates as it manages an approximately $1.34 billion fuel expense outlook for the year. The coverage offers partial protection against fuel-price increases, though second-quarter fuel expense still rose to $355 million from $279 million a year earlier on higher rates per metric ton, and the company said a 10% change in fuel prices could affect expenses by approximately $26 million over the remainder of 2026. Excluding fuel, Royal Caribbean expects 2026 net cruise costs per available passenger cruise day to remain approximately flat on a constant-currency basis, while including fuel, unit cruise costs are expected to rise approximately 1.4% on the same basis. The company added fuel hedges for 2027 when prices eased in June, with coverage as of June 30 reaching 49% of projected 2027 fuel purchases, 29% for 2028 and 14% for 2029. Among peers, Carnival Corporation expects full-year fuel expense of approximately $2.25 billion including emission allowances and reported a nearly 4% year-over-year decline in third-quarter fiscal 2026 fuel consumption, while Norwegian Cruise Line Holdings had hedged approximately 52% of projected 2026 fuel consumption and 38% for 2027 as of June 30, 2026, with second-quarter fuel expense of $219 million.
Carnival Faces Fuel Cost Pressure Ahead of September 29 Earnings
Carnival Corporation heads into its September 29 fiscal third-quarter report with its stock down roughly 11% over the past month and more than 24% for the year, even after a quarter that delivered record net income, record yields, and its lowest leverage ratio in years. The company is the only major cruise line that does not hedge fuel, and it guides fuel cost per metric ton at approximately $812 for the third quarter; its own sensitivity table shows a 10% move in that cost swings adjusted net income by $56 million in a single quarter and $102 million across the remainder of the year. That exposure drove BofA, JPMorgan, TD Cowen, Goldman Sachs, Stifel, Barclays, Deutsche Bank and Wells Fargo to trim price targets between September 14 and September 24, with only Deutsche Bank shifting its rating to Hold from Buy. BofA's Andrew Didora cut to $38 from $42 while keeping Buy, JPMorgan went to $39 from $43 on Overweight, and Goldman Sachs holds a $30 target, arguing 2027 estimates may still need to come down further. Susquehanna, cutting to $28 from $33, flagged Royal Caribbean's new joint venture with Sandals Resorts as a long-term threat to Caribbean yields for both Carnival and Norwegian Cruise Line, while Wells Fargo trimmed to $36 from $38 on Overweight. In its second quarter, Carnival absorbed nearly 30% higher fuel prices and extreme Middle East-related disruption to its European deployments yet still beat its own guidance by $100 million, posted a twelfth straight quarter of record net yields, and cut net debt to adjusted EBITDA to 3.1 times from 3.4 times a year earlier. Hedge fund conviction moved opposite the stock, with bullish funds rising to 63 from 57 quarter over quarter, and short interest climbed to 48.18 million shares as of September 15 from 36.81 million a month earlier, or 3.79% of float.
CCL · Capital · Negative BofA, JPMorgan, TD Cowen, Goldman, Stifel, Barclays, Deutsche Bank and Wells Fargo all trimmed price targets between Sept 14-24, with Deutsche Bank downgrading to Hold.
CCL · Supply · Negative Carnival is the only major cruise line that does not hedge fuel, and its ~$812/ton fuel cost exposure drove a wave of analyst price-target cuts ahead of earnings.
NCLH · Competition · Negative Susquehanna flagged Royal Caribbean's new Sandals Resorts joint venture as a long-term threat to Caribbean yields for both Carnival and Norwegian.
RCL · Competition · Negative Royal Caribbean's new joint venture with Sandals Resorts was cited by Susquehanna as a long-term threat to Caribbean yields for Carnival and Norwegian.
Royal Caribbean Buys 50% Sandals Stake for About US$3b
Royal Caribbean Cruises has agreed to buy a 50% stake in Sandals and Beaches Resorts for about US$3b, forming a joint venture in Caribbean all inclusive vacations. The deal was announced while Royal Caribbean Cruises shares traded at US$238.98, up 3.77% over one day but down 18.24% over 30 days and down 15.63% year to date. Longer term returns remain strong, with the 3 year total shareholder return up 162.62% and the 5 year total shareholder return up 177.91%. The most widely followed narrative values Royal Caribbean Cruises at a fair value of $346.92, roughly 31% above the last close of $238.98, a gap that rests on earnings power compounding as pricing and guest spend hold up. That narrative could change if consumer spending weakens and trims bookings, or if higher fuel and operating costs reduce profitability.
RCL · Capital · Positive Royal Caribbean agreed to buy a 50% stake in Sandals and Beaches Resorts for about US$3b, forming a joint venture in Caribbean all-inclusive vacations.
Iran Offers Conditional Hormuz Reopening; Airlines Rise, Cruise Stocks Fall
A senior Iranian official told a Japanese news agency that Tehran could reopen the Strait of Hormuz within seven days, provided Washington begins ending its blockade of Iranian ports and its military operations, a claim resting on a single unnamed source that American networks said they could not independently verify. Crude drifted lower on the headline, and the airlines finished modestly higher: United Airlines closed at $115.21, up 0.72%, Delta Air Lines added 1.73% to $83.93, American Airlines gained 0.29% to $13.61, and the U.S. Global Jets ETF rose 0.34% to $29.11. Cruise lines moved the other way, with Royal Caribbean falling 6.17% to $234.81 and Carnival slipping 0.13% to $22.28, a split the market read as a consumer-risk story rather than a fuel story. WTI closed at $107.02 on September 15 after trading in the mid $80s in late August, and United management said the recent fuel spike alone was worth about $1.12 of EPS. The deciding variable is tanker transit counts through the strait over the next week; a similar de-escalation headline in June briefly crashed Brent and rallied airlines before the deal collapsed entirely.
UAL · Geopolitics · Positive United Airlines closed up 0.72% as the possible Hormuz reopening eased fuel costs; management noted the recent fuel spike was worth about $1.12 of EPS.
AAL · Geopolitics · Positive American Airlines gained 0.29% as a possible Strait of Hormuz reopening eased fuel-supply fears for airlines.
CCL · Geopolitics · Negative Carnival slipped 0.13% as cruise lines fell on the Hormuz headline, read as a consumer-risk story.
DAL · Geopolitics · Positive Delta Air Lines added 1.73% as the potential Hormuz reopening eased fuel-cost concerns for airlines.
RCL · Geopolitics · Negative Royal Caribbean fell 6.17% as cruise stocks dropped on the Hormuz de-escalation headline, seen as a consumer-risk story.
Meta's Muse AI Agent Drives Nasdaq to Record Highs as Royal Caribbean Bets $3 Billion on Sandals
Meta's new Muse AI agent has powered the Nasdaq composite to fresh record highs, with Meta stock up 20% over the past two weeks as investors pile into tech names ahead of the company's Meta Connect event. AMD this week became the 13th US company valued over $1 trillion, while Nvidia holds the top spot with a $5.5 trillion market cap, and SpaceX, Anthropic and OpenAI are now worth more than every US tech IPO of the past 45 years combined. In a separate development, Royal Caribbean is spending $3 billion for a 50% stake in Sandals, a deal that drew a skeptical note from Stiefel headlined 'What the heck are they thinking?' as cruise line stocks face rising fuel costs and margin pressure. IBM Vice Chair and former National Economic Council Director Gary Cohn told the program that AI will be a productivity boom for the country, that the US must avoid 50 different state-level AI regulations, and that the number one issue facing the US economy is the price of energy, with diesel over $6 potentially problematic were it not for AI-driven capex. HSBC also issued a note titled 'Streamers versus YouTube' arguing that YouTube is taking worsening market share from Netflix, which will be forced to raise spending on original content and pressure its free cash flow and margins. McDonald's, meanwhile, is holding its investor day with the stock down 18% this year while the S&P 500 is up 13%.
META · Technology · Positive Meta's new Muse AI agent powered the Nasdaq to record highs and Meta stock is up 20% ahead of Meta Connect.
RCL · Capital · Negative Royal Caribbean is spending $3 billion for a 50% stake in Sandals, drawing a skeptical Stiefel note amid fuel costs and margin pressure.
NFLX · Competition · Negative HSBC note argues YouTube is taking worsening market share from Netflix, forcing higher content spending and margin pressure.
MCD · · Neutral Only noted as holding its investor day with the stock down 18% this year; no substantive news driver.
Carnival Fuel Efficiency Gains Over 5% in Fiscal Q2 2026
Carnival Corporation improved fuel efficiency by more than 5% in the second quarter of fiscal 2026, building on a gain of more than 6% last year, as the company reported net income of $569 million, up more than 20% year over year despite a nearly 30% increase in fuel price. Cruise costs excluding fuel per available lower berth day were essentially flat year over year, compared with the approximately 2.5% increase anticipated in the company's March guidance, and the ex-fuel cost improvement contributed five cents per share to the quarter's outperformance, while improvements in depreciation expense and fuel consumption added one cent per share. For fiscal 2026, Carnival expects cruise costs excluding fuel per available lower berth day to increase approximately 1.3% on a normalized basis, with favorable movements in depreciation expense, fuel consumption, fuel mix, net interest expense and other income expected to provide eight cents per share of operational favorability. Among peers, Royal Caribbean Group generated adjusted EBITDA of $1.8 billion and an EBITDA margin of 38% in the second quarter of 2026, with net cruise costs per available passenger cruise day excluding fuel up 3.9% year over year, and it expects $1.3 billion of fuel expense for 2026 with 58% of remaining fuel consumption hedged. Norwegian Cruise Line Holdings identified an additional $100 million of annualized savings and cash benefits in the second quarter, bringing actions announced over the past two quarters to approximately $225 million, and revised its full-year adjusted net cruise cost excluding fuel outlook to a decline of approximately 25 basis points.
CCL · Capital · Positive Carnival reported Q2 fiscal 2026 net income of $569M, up over 20% YoY, with fuel efficiency gains and flat ex-fuel costs driving EPS outperformance.
NCLH · Capital · Positive Norwegian identified an additional $100M of annualized savings and cash benefits, bringing total actions to ~$225M, and revised its ex-fuel cost outlook to a ~25bp decline.
RCL · Capital · Neutral Royal Caribbean is cited for comparison with $1.8B adjusted EBITDA and 38% margin, but its ex-fuel costs rose 3.9% YoY, a mixed context mention.
Royal Caribbean Completes $1.25 Billion Notes Sale at 5.55% Coupon
Royal Caribbean Group said on August 20 that it completed a sale of $1.25 billion of notes carrying a 5.55% coupon and maturing on January 20, 2034, with proceeds earmarked first for floating-rate term loans and any remainder for repaying or refinancing other debt. The offering rode on a shelf registration filed on February 29, 2024, and the refinancing does not shrink the debt pile, since the new notes pay off old borrowings while the company still expects net interest of $980 million to $990 million this year. The deal lands alongside a second-quarter earnings beat, when Royal Caribbean reported adjusted earnings of $4.21 per share on July 28 and raised full-year adjusted EPS guidance to a range of $17.73 to $17.87, implying 14% growth, even though that $4.21 came in below the $4.38 posted in the same quarter of 2025. Third-quarter net yields are guided to roughly flat against 2025 while capacity grows 8.5%, so expected revenue growth of 8% comes from more capacity rather than better yields, and management says prolonged geopolitical activity has dented bookings on select itineraries. The company held $6.9 billion of liquidity as of June 30 and added $250 million to its revolving credit line in July, against $2.7 billion due in 2027 and $3.4 billion in 2028, while roughly $4.7 billion of capital spending is planned for 2026, mostly for new ships and destination projects.
RCL · Capital · Positive Completed $1.25B notes sale at 5.55% to refinance floating-rate term loans and other debt, alongside a Q2 earnings beat and raised full-year EPS guidance.
Oil's 40% Surge Since August Pressures Airline and Cruise Fuel Costs
A 40% spike in oil futures since the beginning of August has put fuel costs back in focus for the airline and cruise industries, with oil futures challenging $110 per barrel. Within the cruise industry, Carnival is the most vulnerable because it buys fuel at current spot-market prices rather than using hedges, and an industry study finds a 10% increase in fuel costs per metric ton can lower Carnival's annual net income by as much as $140M. Royal Caribbean employs the most efficient hedging strategy, with as much as 60% of its fuel needs locked in at below-market prices, so the same 10% increase costs it roughly $50M annually in net income, while Viking Holdings is the least exposed on a fuel consumption basis thanks to its smaller fleet and higher-income, relatively inelastic customer base. In the airline industry, fuel hedges have cushioned some larger European carriers, but legacy U.S. carriers have abandoned the strategy altogether; Delta Air Lines has its own oil refinery in Pennsylvania, while American Airlines and United Airlines stopped hedging to capitalize on lower fuel prices prior to February 2026, leaving them vulnerable. According to Bloomberg research, every one-cent increase in the price of a gallon of jet fuel raises American's annual operating expenses by about $46M and United's by $40M annually, and since the start of August the oil spike has translated into an 18% drop in United's share price, 24% for American, and 16% for Delta.
AAL · Supply · Negative American stopped hedging and is vulnerable to the oil spike, with each one-cent rise in jet fuel adding ~$46M to annual operating expenses.
CCL · Supply · Negative Carnival buys fuel at spot prices with no hedges, so a 10% fuel cost increase can cut annual net income by up to $140M.
DAL · Supply · Negative Delta faces higher fuel costs from the 40% oil surge, though its Pennsylvania refinery cushions the blow.
RCL · Supply · Negative Royal Caribbean faces higher fuel costs from the oil spike, though its 60% below-market hedges limit the hit to ~$50M per 10% increase.
UAL · Supply · Negative United abandoned hedging and is exposed to the oil spike, with each one-cent rise in jet fuel adding ~$40M to annual operating expenses.
VIK · Supply · Negative Oil's 40% surge raises fuel costs, though Viking is the least exposed on a fuel-consumption basis due to its smaller fleet and inelastic customer base.
Royal Caribbean Group Declares Quarterly Dividend of $1.50
Royal Caribbean Group's Board of Directors has declared a quarterly dividend of $1.50 per common share, payable on October 8, 2026, to shareholders of record at the close of business on September 17, 2026. The company, which operates 71 ships across its three wholly owned brands and a joint venture, continues to expand its portfolio with new destinations and river cruising in 2027.
Royal Caribbean Stock Down 20% From High Amid Rising Costs
Royal Caribbean's stock has fallen 20% from its 52-week high and 14% over the past year, even as the company raised its full-year earnings guidance. The cruise operator's latest quarter showed revenue up just 6% and adjusted earnings down for the first time since returning to profitability, hurt by an 11% jump in operating expenses including higher fuel, food, and labor costs. Management now expects 2026 revenue to climb 9% and adjusted earnings per share between $17.73 and $17.87, a 14% increase at the midpoint. The stock trades at 16 times the midpoint of this year's adjusted earnings guidance and yields 1.7% after four dividend increases since reinstatement.
Royal Caribbean Cruises Earnings Beat Leaves Undervalued Narrative In Question
Royal Caribbean Cruises shares fell 5.3% after the company reported second quarter 2026 results that beat revenue expectations but showed a 3.9% decline in adjusted earnings. The stock now trades at $292.0, with a 14.02% 90-day share price return and a 3.09% year-to-date return, while the one-year total shareholder return declined 13.83% after recent earnings and debt issuance news. The most widely followed fair value estimate is $336.31, implying the stock is 13.2% undervalued, based on a discount rate of 9.08% and expectations for steady revenue expansion, improving profit margins, and strong cash generation. Key risks include political hurdles around the Perfect Day Mexico project and any renewed consumer pullback in discretionary travel spending.
Royal Caribbean Beats Q2 Estimates, Refinances $1.25 Billion Debt
Royal Caribbean Cruises reported second-quarter 2026 revenue and adjusted earnings above analyst estimates and raised its full-year EPS guidance, while completing a US$1.25 billion senior unsecured notes offering at 5.550% due 2034 to refinance existing debt. Adjusted earnings dipped 3.9% year over year, keeping cost pressures in focus, and the new long-term borrowing slightly tilts near-term risks toward leverage. The company projects $23.4 billion revenue and $6.0 billion earnings by 2029, implying 8.4% annual revenue growth and a $1.5 billion earnings increase from $4.5 billion today. Simply Wall St's narrative model values the stock at $336.31, a 15% upside to its current price, while some analysts expect earnings of about US$6.7 billion by 2029.
Royal Caribbean completes $1.25 billion senior notes offering
Royal Caribbean Cruises Ltd. has completed its registered public offering of $1.25 billion aggregate principal amount of 5.550% senior unsecured notes due 2034. The notes will mature on January 20, 2034, unless earlier redeemed or repurchased. The company intends to use the net proceeds to repay a portion of outstanding borrowings under its floating rate term loan facilities and any remaining net proceeds to repay or refinance other existing indebtedness. BNP Paribas Securities Corp., BofA Securities, Inc. and Citigroup Global Markets Inc. acted as lead book-running managers for the offering.
Royal Caribbean Cruises unveils 2034 senior unsecured notes offering
Royal Caribbean Cruises has announced a new offering of senior unsecured notes due 2034. The notes will rank ahead of subordinated obligations but behind secured borrowings, adding a fixed maturity point to the company's funding mix. The offering is expected to affect the company's capital structure, debt profile, and liquidity, with proceeds potentially used for refinancing existing borrowings or funding new projects. The move comes as the company reported second-quarter 2026 revenue of US$4,832 million and net income of US$1,128 million, alongside active buybacks of US$1,194.25 million since late 2025. Investors will watch how the new debt impacts leverage and interest cover, especially given management's expectation of roughly 9% year-over-year revenue growth in 2026.
RCL · Capital · Neutral New debt offering may increase leverage, but proceeds could refinance existing borrowings; impact on capital structure is mixed.
Royal Caribbean Raises 2026 Earnings Outlook but Valuation Keeps Risk-Reward Balanced
Royal Caribbean Cruises raised its 2026 adjusted earnings per share guidance to a range of $17.73 to $17.87, implying 14% year-over-year growth, supported by stronger second-quarter performance and an improved outlook for the rest of the year. The company reported second-quarter adjusted earnings of $4.21 per share, beating the Zacks Consensus Estimate by 6.1%, while revenues of $4.83 billion topped expectations by 0.5%. Despite the earnings beat, net income attributable to Royal Caribbean fell 6.8% year over year, adjusted EBITDA margin contracted to 37.9% from 40.8%, and 2026 capital expenditures are expected to be approximately $4.7 billion. The stock trades at 4.23 times forward 12-month sales, above the Zacks sub-industry average of 2.74 times, leaving limited upside to a $339 price target based on a 4.44 times forward sales multiple. Royal Caribbean ended the quarter with total debt of $23.4 billion and approximately $12.8 billion of remaining contractual ship purchase obligations, balanced by $6.9 billion of liquidity and improving operating cash flow. The stock carries a Zacks Rank of 3, or Hold, reflecting a mixed setup where positive estimate activity and momentum are offset by premium valuation and sizable financial commitments.
Royal Caribbean Growth Drivers Investors Should Watch Through 2028
Royal Caribbean is pairing record pricing with a broader vacation platform built around ships, destinations, loyalty and technology, raising the question of whether these initiatives can widen its addressable market while supporting earnings growth and cash generation through a heavy investment cycle. In the second quarter of 2026, capacity increased 5% year over year and the company carried nearly 2.4 million guests, with constant-currency net yields rising 1.2% ahead of guidance. Fleet expansion remains a core growth lever, with capacity expected to rise 6.6% in 2026 followed by 4%, 6% and 7% in 2027, 2028 and 2029 respectively, supported by new Icon-class, Oasis-class and Discovery-class ships. Royal Caribbean plans to expand its private destination portfolio from three locations to eight by 2028, with Perfect Day expected to draw nearly four million guests in 2026 and Royal Beach Club Nassau becoming the company's highest-rated Bahamas experience. Celebrity River Cruises will add another vacation occasion, with the first vessels scheduled for delivery in 2027 and additional ships in 2028. The company expects 2026 revenues to grow 9% and adjusted earnings per share to rise 14% to $17.73-$17.87, while capital expenditures are projected at approximately $4.7 billion. The stock carries a Zacks Rank #3 (Hold), reflecting strong operating momentum weighed against execution risks and recent estimate movement.
Royal Caribbean Raises Full-Year Earnings Guidance Despite Lower Revenue Outlook
Royal Caribbean raised its full-year adjusted earnings per share guidance to a range of $17.73 to $17.87, up from a prior range of $17.10 to $17.50, even as it lowered its full-year revenue growth forecast from 10% to 9%. The cruise operator reported second-quarter revenue of $4.83 billion, matching estimates and up 6% from a year ago, while adjusted earnings per share fell to $4.21 from $4.38 but still beat the consensus estimate of $3.98. The company cited a challenging geopolitical environment, including the war in Iran and higher fuel costs, as factors weighing on results. Royal Caribbean is targeting 20% compound annual earnings growth through 2027 under its Perfecta program, and CFO Naftali Holtz said consumer demand remains strong with bookings at record prices.
Royal Caribbean earnings show cruise lines must absorb fuel costs, UBS analyst says
Royal Caribbean's latest earnings report highlights that cruise operators cannot pass higher fuel costs directly to consumers without hurting demand, according to UBS leisure analyst Robin Farley. Royal Caribbean trimmed its full-year yield forecast, while Carnival Corporation has guided more conservatively and is seen as well positioned due to strong Caribbean demand and a new private island. Norwegian Cruise Line, set to report on July 30, faces company-specific execution issues with its yield growth guidance already at negative 3 to 5 percent, contrasting with yield growth at Royal Caribbean and Carnival. Farley rates Norwegian as neutral and Carnival as a buy, noting Carnival's trailing twelve-month performance has slightly outpaced Royal Caribbean's.
Royal Caribbean beats Q2 earnings estimates but trims revenue outlook
Royal Caribbean reported second-quarter adjusted earnings of $4.21 per share, beating analyst expectations of $3.98 per share, while trimming its full-year revenue growth target to roughly 9% from roughly 10% due to softening demand on some sailings linked to geopolitical tensions. The company raised its full-year adjusted earnings outlook to $17.73–$17.87 per share, up from the prior $17.10–$17.50 range. Second-quarter revenue rose 6% to $4.83 billion, narrowly topping the $4.82 billion forecast, and net income was $1.13 billion, or $4.20 per diluted share, compared with $1.21 billion, or $4.41 per diluted share, a year earlier. Chief Financial Officer Naftali Holtz said overall demand remains healthy, with record pricing and booking volumes above last year, and noted that 2027 booking trends are running ahead of historical levels. The company expects third-quarter adjusted EPS of $6.26 to $6.36 and total revenue growth of approximately 8%.
RCL · Capital · Neutral Beat Q2 earnings estimates and raised full-year EPS guidance, but trimmed revenue growth outlook due to softening demand from geopolitical tensions.
Travel Stocks Surge as US-Iran Tensions Ease and Oil Prices Tumble
Shares of major airlines and cruise operators soared after a reported pause in US-Iran military hostilities sent global oil prices tumbling. Brent crude futures plunged over 6% to around $90 a barrel, sharply reducing fuel costs that are among the largest variable expenses for travel companies. Royal Caribbean rose 1.4%, Carnival gained 2.1%, Norwegian Cruise Line jumped 2.8%, and American Airlines and Delta each advanced 1.7%. The de-escalation in Middle East tensions triggered a risk-on rotation into fuel-sensitive, high-beta travel stocks as investors priced in lower operational costs and easing bond yields.
Royal Caribbean Appoints Former Airbnb Executive Tara Bunch to Board
Royal Caribbean Cruises has appointed Tara Bunch, former Senior Vice President at Airbnb, to its Board of Directors. Bunch brings executive experience from Airbnb, Apple, and Hewlett-Packard, as well as governance experience from her board role at Vanguard. Her background in global operations, digital platforms, and customer experience is expected to influence the company's technology, data, and service design strategies. The appointment comes as Royal Caribbean's stock trades at $286.16, with a year-to-date gain of 1.0% and a 5-year return of 263.8%.
RCL · Technology · Positive Appointment of executive with digital platform and customer experience expertise to board, expected to influence technology and service design strategies.
Royal Caribbean Trades at Discount to Industry, Sector, and S&P 500
Royal Caribbean Cruises is trading at a forward 12-month price-to-earnings ratio of 15.29, below the Zacks Leisure and Recreation Services industry average of 16.82, the broader Consumer Discretionary sector at 16.36, and the S&P 500 Index at 21.26. The discount reflects healthy cruise demand, record Wave Season bookings, and growing digital and loyalty engagement, though near-term headwinds include higher fuel costs, geopolitical disruptions affecting Mediterranean and West Coast Mexico itineraries, and elevated airfares. The company reported 11% revenue growth in the first quarter of 2026, with adjusted EBITDA margin expanding more than 300 basis points to 38%, while earnings estimates for 2026 have edged lower to $17.30 per share. Zacks Investment Research rates Royal Caribbean a Hold, suggesting current investors maintain positions while prospective investors await a more favorable entry point.
RCL · Capital · Neutral Trading at a P/E discount to industry and sector, with Zacks Hold rating; mixed signals from revenue growth and margin expansion vs. lowered earnings estimates and headwinds.
Royal Caribbean Cruises Could Be 3% Undervalued After Russell Value Index Inclusion
Royal Caribbean Cruises has been added to several Russell value indexes, including the Russell 1000 Value, drawing new attention to the stock. The shares currently trade at US$288.08, and a narrative fair value estimate of US$297.03 suggests the stock may be about 3% undervalued. The company is seen as evolving into a lifestyle platform catering to modern travel preferences such as wellness and experiential leisure. However, risks remain if travel demand softens or debt reduction stalls, which could pressure cash flows.
Norwegian Cruise Line Jumps 8%, Carnival Climbs 5%, Royal Caribbean Rises 3% in Cruise-Stock Rebound
Cruise stocks staged a sharp rebound at midday Thursday, with Norwegian Cruise Line Holdings leading the group up 8% to $20, Carnival shares up 5% to $27, and Royal Caribbean Cruises up 3% to $289. The bounce follows a rough stretch where Norwegian had fallen 11% across five sessions, Carnival 10%, and Royal Caribbean 8%, leaving the sector primed for a technical snapback. Easing crude oil prices, with WTI down 2% to $72.05 a barrel, and analyst upgrades provided a nudge, as Morgan Stanley raised its Norwegian price target to $22 and BMO Capital Markets upgraded Norwegian to Hold while naming Royal Caribbean its top pick with a $370 target. Norwegian carries $15.2 billion in debt at 5.3 times net leverage and cut its 2026 earnings guidance citing Middle East disruption and softer European demand, while Royal Caribbean offers a 1.77% dividend yield and trades at 18 times earnings.
StockStory flags Dollar Tree, Tractor Supply, and Royal Caribbean as S&P 500 stocks to avoid
StockStory identified three S&P 500 stocks it believes investors should think twice about. Dollar Tree faces annual revenue declines of 11.8% over three years and a gross margin of 36.4% that must be offset through higher volumes. Tractor Supply posted annual revenue growth of just 2.6% over three years and lagging same-store sales, with a gross margin of 36.4% below competitors. Royal Caribbean saw disappointing passenger cruise days over two years and low returns on capital, though its free cash flow margin is expected to rise by 1.2 percentage points next year.
Royal Caribbean Stock May Be 27% Undervalued After Fuel Cost Guidance Cut
Royal Caribbean Cruises stock may be undervalued by about 27% relative to its estimated intrinsic value, according to a Discounted Cash Flow analysis by Simply Wall St. The DCF model, based on roughly $2.0 billion of free cash flow over the last twelve months, points to an intrinsic value of about $417 per share, implying the stock is roughly 26.6% undervalued. The recent cut to Royal Caribbean's 2026 earnings guidance due to higher fuel costs helps explain why the share price trades below this intrinsic value. Additionally, the stock trades on a price-to-earnings ratio of about 18.3 times, compared with an industry average of roughly 23.6 times and a tailored fair P/E estimate of about 29.8 times, further suggesting undervaluation. The stock screens as undervalued on five of six valuation checks, though investor caution around fuel costs and project execution risk remains a key debate.
Royal Caribbean Launches Roald Dahl Charity Partnership on Legend of the Seas
Royal Caribbean Cruises has launched a multi-year partnership with Roald Dahl's Marvellous Children's Charity, tied to the debut of Legend of the Seas in Europe. The collaboration features onboard experiences themed around Charlie and the Chocolate Factory and integrates guest fundraising to support specialist pediatric nurses caring for seriously ill children. The initiative aims to deepen the cruise line's family-friendly appeal while connecting guests directly to children's health causes.
Royal Caribbean Expands Private Destinations to Drive Multi-Year Yield Growth
Royal Caribbean is expanding its private-destination portfolio to support multi-year yield growth through differentiated vacation experiences. The company recently opened Royal Beach Club Santorini, following the launch of Royal Beach Club Paradise Island, and strong demand underscores the value of proprietary destinations. The next phase includes Royal Beach Club Cozumel expected in early 2028, and Perfect Day Mexico and Costa Maya expected in late 2027 and ramping in early 2028, which are projected to further differentiate itineraries and contribute to yield growth. Perfect Day Mexico also provides a larger opportunity in the Gulf and Texas markets, where Royal Caribbean sees room to build demand relative to Florida. The strategy faces increasing competition, as Carnival is leveraging scale and destination density with assets like Celebration Key and its Paradise Collection, while Norwegian is upgrading Great Stirrup Cay with a new waterpark to support demand and yield improvement.
RCL · Demand · Positive Strong demand for proprietary destinations like Royal Beach Club Santorini and Paradise Island drives yield growth and expansion plans.
CCL · Competition · Negative Royal Caribbean's private destination expansion intensifies competition, potentially pressuring Carnival's market share and yield growth.
NCLH · Competition · Negative Royal Caribbean's new private destinations, including Perfect Day Mexico, increase competitive pressure on Norwegian's own destination upgrades.
Royal Caribbean has been rated Zacks Rank #4 (Sell), suggesting it may underperform the broader market in the near term. The cruise operator's shares have returned 9.2% over the past month, outperforming the Zacks S&P 500 composite's 1.8% decline and the Zacks Leisure and Recreation Services industry's 7.4% gain. For the current quarter, the consensus earnings estimate stands at $3.91 per share, a year-over-year decline of 10.7%, while full-year estimates of $17.27 and $19.86 for the current and next fiscal years imply growth of 10.4% and 15%, respectively. All estimates have remained unchanged over the last 30 days. Revenue is projected at $4.81 billion for the current quarter, up 6% year-over-year, with full-year estimates of $19.63 billion and $21.06 billion indicating increases of 9.4% and 7.3%. The company last reported revenues of $4.45 billion, an 11.3% increase, and earnings per share of $3.60, beating the consensus estimate by 12.5%. Royal Caribbean carries a Zacks Value Style Score of C, indicating it is trading at par with its peers.
Citi Raises Royal Caribbean Price Target to $362, Reaffirms Buy Rating
Citi analyst James Hardiman raised the firm's price target on Royal Caribbean Cruises to $362 from $348 and reaffirmed a Buy rating on June 16. The new target implies a 13% upside from current levels. UBS analysts earlier noted the cruise industry remains attractive due to strong value proposition and widening price advantage over hotels, with operators building larger private destinations to capture first-time travelers.
Carnival’s Record Run Still Leaves It at Half Royal Caribbean’s Valuation
Carnival posted its sixth straight earnings beat and twelfth consecutive quarter of record net yields, yet its stock trades at roughly half the valuation multiple of rival Royal Caribbean. Carnival reported adjusted earnings per share of $0.41 on revenue of $6.66 billion, while Royal Caribbean delivered adjusted EPS of $3.60 on revenue of $4.45 billion. Carnival’s customer deposits reached a record $9.0 billion and its fleet is 93% booked for 2026, but the company is still working down a $24.9 billion debt load. Royal Caribbean, with a forward EPS guide of $17.10 to $17.50 and an adjusted EBITDA margin of 38.2%, trades at a trailing price-to-earnings ratio of 19 compared with Carnival’s 13. The divergence hinges partly on inflation risks, as headline PCE re-accelerated to 4.07% in May 2026 and energy costs surged over 24%, testing Carnival’s early 2027 booking strength.
CCL · Capital · Neutral Carnival posted earnings beat and record yields but trades at half Royal Caribbean's valuation due to debt and inflation risks.
RCL · Capital · Positive Royal Caribbean has higher valuation multiple, stronger EPS, and better margins compared to Carnival.
Royal Caribbean Cruises Outshines MGM Resorts as the Better Consumer Stock for 2026
Royal Caribbean Cruises is the stronger buy among consumer discretionary stocks in 2026, according to a Motley Fool analysis comparing it with MGM Resorts International. Royal Caribbean reported fiscal 2025 revenue of approximately $17.9 billion, an 8.8% increase, and net income of about $4.3 billion, yielding a net margin of roughly 23.8%. In contrast, MGM Resorts posted revenue of nearly $17.5 billion with only 1.7% growth and a net margin of about 1.2%, weighed down by softening Las Vegas performance and a trimmed outlook at its BetMGM joint venture. Royal Caribbean also benefits from strong forward bookings, with roughly two-thirds of 2026 capacity already reserved at record prices, and projects double-digit earnings growth. While Royal Caribbean carries a lower forward price-to-earnings ratio of 18.3 times versus MGM's 28.9 times, MGM trades at a cheaper price-to-sales ratio of 0.7 times compared to Royal Caribbean's 4.8 times.
MGM · Demand · Negative MGM Resorts reported weak revenue growth (1.7%), softening Las Vegas performance, and a trimmed BetMGM outlook, indicating lower end-customer demand.
RCL · Demand · Positive Royal Caribbean reported strong revenue growth (8.8%), record forward bookings with two-thirds of 2026 capacity reserved at record prices, and double-digit earnings growth.
StockStory highlights Seagate and Coinbase as large-cap picks, flags Royal Caribbean headwinds
StockStory identifies two large-cap stocks with competitive advantages and one facing headwinds. Seagate, with a market cap of $196.4 billion, posted annual revenue growth of 32.6% over the past two years and expanded its operating margin by 10.7 percentage points over five years. Coinbase, valued at $42.27 billion, achieved 28.5% revenue growth over two years and maintains a gross margin of 85.9%. Royal Caribbean, at a $77.23 billion market cap, saw underwhelming passenger cruise days and a 6% return on capital, signaling limited profitable growth opportunities.
COIN · Capital · Positive StockStory highlights Coinbase as a large-cap pick with strong revenue growth and high gross margin, signaling financial strength.
RCL · Demand · Negative StockStory flags underwhelming passenger cruise days and low return on capital, indicating weak demand and limited growth.
STX · Capital · Positive StockStory highlights Seagate as a large-cap pick with strong revenue growth and expanding operating margin.
Royal Caribbean and Lindblad Expeditions Shares Soar as Oil Prices Slide
Shares of Royal Caribbean and Lindblad Expeditions jumped in afternoon trading after global oil prices slid 3%, easing cost pressures across the travel sector. WTI crude broke below $70 per barrel while the 10-year Treasury yield dropped below 4.5%, providing a dual tailwind of lower fuel costs and increased consumer disposable income. Royal Caribbean rose 4% and Lindblad Expeditions gained 5.4%, with the latter setting a new 52-week high at $27.02 per share. The moves reflect market optimism that cheaper oil and lower yields will support resilient consumer travel spending, even as broader inflation cools.
Royal Caribbean Opens Alaska’s Largest Cruise Terminal in Seward
Royal Caribbean Group opened the Dale R. and Carol Ann Lindsey Alaska Railroad Terminal in Seward, now Alaska’s largest cruise terminal, featuring upgraded passenger facilities, shore power, and direct rail links to Anchorage and Fairbanks. The terminal’s year-round design and shore power capability aim to improve cruise operations and deepen local economic ties. The new terminal reinforces the company’s focus on premium guest experiences and operational efficiency but does not materially change the main short-term catalyst of sustaining high occupancy and pricing. Royal Caribbean’s narrative projects $23.4 billion revenue and $6.0 billion earnings by 2029, requiring 8.4% yearly revenue growth and about a $1.5 billion earnings increase from $4.5 billion today. Some analysts take a more cautious view, assuming revenue of about $23.0 billion and earnings of roughly $5.8 billion by 2029, citing risks from tighter climate rules and higher costs.
Carnival Plunges 6% as Weak Guidance Overshadows Earnings Beat
Carnival stock fell 6% to $28.41 after the cruise operator issued weaker-than-expected forward guidance, overshadowing its record quarterly revenue of $6.7 billion and an adjusted earnings per share beat of $0.41. The decline stood in contrast to peers Royal Caribbean, which slipped 1% to $306, and Norwegian Cruise Line, which edged up half a percentage point to $20.14. Royal Caribbean reported net income of $950 million and adjusted earnings per share of $3.60, while Norwegian posted $2.33 billion in revenue with 10% year-over-year growth but lowered its full-year EBITDA guidance. The divergent market reactions highlight how guidance and cost pressures are shaping near-term sentiment across the cruise sector.
Carnival stock sinks on weak summer profit forecast
Carnival Corporation reported record second-quarter revenue and adjusted net income but forecast third-quarter profit below analyst expectations, sending its stock down about 8% in early trading. Revenue reached $6.66 billion and adjusted net income hit $569 million for the quarter ended May 31, both second-quarter records, with adjusted earnings per share of $0.41 beating the $0.34 consensus estimate. However, third-quarter adjusted EPS guidance of roughly $1.35 fell short of the $1.42 consensus, and full-year adjusted EBITDA guidance was trimmed to approximately $7.11 billion from a prior target of $7.19 billion. CEO Josh Weinstein cited geopolitical pressures, particularly in the Mediterranean region, as a key headwind, while fuel costs rose nearly 30% to $793 per metric ton. Fellow cruise operators also declined, with Royal Caribbean dropping roughly 5% and Norwegian Cruise Line Holdings sliding around 2%.
CCL · Demand · Negative Carnival forecast Q3 profit below expectations due to geopolitical pressures in the Mediterranean, a key demand headwind.
NCLH · Demand · Negative Norwegian Cruise Line shares fell about 2% as the sector declined on Carnival's weak forecast, indicating broader demand concerns.
RCL · Demand · Negative Royal Caribbean shares dropped roughly 5% as the sector declined on Carnival's weak forecast, indicating broader demand concerns.
Carnival Corp. to Report Earnings Amid Streak of Profit Beats and Market Leadership Shift
Carnival Corp. reports its fiscal second-quarter results on Tuesday morning, with investors focused on whether the cruise line can extend its 11-quarter streak of beating adjusted earnings per share estimates. Wall Street expects a profit of $0.34 per share, down from $0.35 a year earlier, as rising fuel costs pressure margins. Guidance will be closely watched after rival Norwegian Cruise Line recently cut its full-year outlook and warned of negative net yields, a key industry metric. Carnival has also outperformed larger competitor Royal Caribbean in stock returns over the past year, gaining 30%, and a strong report could help it retain that newfound market leadership.
Royal Caribbean Posts Record First Quarter but Valuation Concerns Linger
Royal Caribbean Cruises reported its best quarter ever, with first-quarter net income surging nearly 30% year-over-year to $950 million, or $3.48 per diluted share, while adjusted earnings reached $1 billion, or $3.60 per share, beating analyst estimates. Revenue rose 11% to $4.45 billion, just shy of the $4.46 billion consensus, driven by strong demand, premium pricing, and higher onboard spending. The company carried 2.5 million passengers in the quarter, up from 2.24 million a year earlier, and projected full-year 2026 adjusted earnings per share in a range of $17.10 to $17.50, implying double-digit growth. Despite the robust performance and expansion plans that include a seventh Oasis-class ship, the stock has already gained 250% over five years, and the average analyst price target of $345.53 suggests only about 10% upside, leaving investors to weigh strong fundamentals against a rich valuation.
Applied Materials Surges 43% While Royal Caribbean and Xponential Fitness Face Headwinds
Applied Materials shares jumped 43.3% over the past month, driven by projected revenue growth of 33% for the next 12 months, an operating margin of 29.1%, and a return on invested capital of 46.2%. In contrast, Royal Caribbean gained 22.1% but faces weak demand with declining passenger cruise days and a low 6% return on capital, while Xponential Fitness rose 17.3% despite a 4.4% annual sales decline and a free cash flow margin of just 1.3%. Applied Materials trades at $619.41 per share, Royal Caribbean at $312.80, and Xponential Fitness at $6.70.
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