Royal Caribbean stock dips as Bernstein reiterates Outperform rating

Published 30/07/2025, 16:58
Royal Caribbean stock dips as Bernstein reiterates Outperform rating

Investing.com - Royal Caribbean Cruises (NYSE:RCL) stock received a reiterated Outperform rating and $360.00 price target from Bernstein SocGen Group despite mixed quarterly results. According to InvestingPro data, the company maintains a "GREAT" Financial Health score, with analysts’ price targets ranging from $200 to $420.

The cruise operator reported second-quarter results that exceeded expectations for yield and EBITDA of $5.94 billion, but its third-quarter yield growth guidance of just 2-2.5% disappointed investors. The stock has shown remarkable strength with a 115.4% return over the past year and revenue growth of 13.66%, though InvestingPro data indicates the stock is currently trading above its Fair Value.

Royal Caribbean also trimmed the top end of its full-year yield guidance, contributing to market concerns despite the company’s strong overall performance in the most recent quarter.

Bernstein remains bullish on the cruise industry’s long-term prospects, citing expectations that demand will outpace supply through 2035, which combined with "accretive hardware" should drive margin expansion and return on invested capital improvements.

The research firm projects Royal Caribbean will deliver 19% earnings per share growth through 2026, with shares trading at 17 times 2027 earnings estimates, supporting its continued Outperform rating despite the recent stock price volatility.

In other recent news, Royal Caribbean Cruises reported its second-quarter 2025 earnings, which exceeded analyst expectations with an adjusted earnings per share of $4.38, surpassing the forecast of $4.08 by 7.35%. However, the company’s revenue slightly missed projections, coming in at $4.54 billion compared to the expected $4.55 billion. Truist Securities reiterated its Hold rating for Royal Caribbean, maintaining a price target of $337.00, despite the mixed quarterly results. The firm’s Q2 earnings per share beat the mid-point of guidance by $0.33 and consensus by $0.29, attributed mainly to better-than-expected costs and performance from its TUI (LON:TUIT) brand. Meanwhile, Mizuho (NYSE:MFG) raised its price target for the company to $372.00, up from $368.00, while maintaining an Outperform rating. Mizuho noted that the stock’s current all-time highs have led the market to seek potential weaknesses, especially concerning the second-half outlook. Despite the earnings beat, the slight revenue miss and cautious market sentiment have contributed to a complex investor response. These developments highlight the company’s ongoing financial performance and market positioning.

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