RCL Stock Forecast & Price Target

Royal Caribbean Group has demonstrated a robust increase in financial performance, with Return on Capital (ROC) rising from 13.80% to 15.40% over the last twelve months, along with a forecasted increase to 18.03% in the near term. Additionally, the company's net sales revenue saw a notable year-over-year growth of 12.10%, advancing from $15.33 billion to $17.18 billion for the year ending June 2025, indicating healthy demand for its cruise offerings. Furthermore, Economic Profit (EP) has surged by 31.64% year-over-year, increasing from $1.19 billion to $1.57 billion, reflecting the company's effective management and operational efficiency in the expanding cruise market.

Royal Caribbean's projected financial outlook reflects several challenges that contribute to a negative sentiment surrounding its stock. The company anticipates headwinds in FY25 EPS guidance due to adverse weather conditions and political unrest affecting the Labadee destination, leading to downward revisions in unit cost growth projections and an "anemic" cost growth forecast for FY26 amidst increasing capacity. Additionally, the anticipated timing of new ship deliveries is expected to further hinder revenue yields into late 2025, as new vessels typically experience a ramp-up period that maintains lower load factors to ensure customer satisfaction.