Royal Caribbean (RCL) reported second-quarter earnings yesterday that featured revenue and profit beats alongside an optimistic view for the road ahead. But, the stock has fallen 6% in the past week. Here are sales and earnings figures for Q2:

  • Adjusted EPS: $3.21 compared to the $2.77 consensus.
  • Revenue: $4.11 billion compared to the $4 billion consensus.

Both the top and bottom lines showed improvements year over year, with earnings up from $1.82 and revenue up from just $3.5 billion.

Much of this can be attributed to more passengers embarking on cruises. Ticket revenue came up to $2.88 billion for the quarter compared to $2.4 billion this time last year. Customers spent more onboard the vessels, too.

However, expenses were up slightly as well. Total cruise operating expenses worked out to $2.2 billion, more than 10% higher than Q2 2023. 

It looks to be smooth sailing ahead as well. Royal Caribbean is forecasting a favorable demand and pricing landscape for the remainder of 2024. The company shared a Q3 forecast of adjusted EPS between $4.90 and $5.

Further out, the full-year outlook has been raised as well. Now, the cruise operator expects earnings somewhere in the range of $11.35 to $11.45. The previous guidance called for just $10.70 to $10.90, while the analyst outlook is set at $11.14.

The cruise industry as a whole is strong right now, with competitors such as Carnival outpacing the expectations in its recent quarterly earnings as well. 

While RCL hasn’t popped on the Q2 performance yet, the stock has performed well through 2024 thus far. It’s up more than 10% in the past 3 months and 21% year-to-date.

So, where does that leave investors or prospective traders? We took a closer look at RCL in the VectorVest stock forecasting software and found 3 things you need to see right now…

RCL Has Excellent Upside Potential With Fair Safety and Timing

Royal Caribbean Delivers Solid Earnings and Upbeat Outlook, So Why is the Stock Down?

VectorVest is a proprietary stock rating system that helps you win more trades with less work. It takes complex technical and fundamental data and distills it into clear, actionable insights.

You’re given everything you need to make calculated, emotionless decisions in 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT). 

Each sits on a scale of 0.00-2.00 with 1.00 being the average. This makes interpretation quick and easy - but you’re also given a buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. As for RCL, here’s what you need to know:

  • Excellent Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. This makes it a much better indicator than the standard comparison of price to value alone. RCL has an excellent RV rating of 1.68. The stock is undervalued too. It has a current value of $284.34/share.
  • Fair Safety: The RS rating is a risk indicator. It’s calculated from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 0.93 is fair for RCL.
  • Fair Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year. The RT rating of 0.95 is fair for RCL as well.

The overall VST rating of 1.20 is good for RCL, but not quite enough to earn the stock a buy yet. A more meaningful price trend needs to form first. 

So, stay up to date on this opportunity, or better yet, take a closer look with your own free stock analysis at VectorVest today so you can capitalize when the timing is right!

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Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. RCL delivered impressive second-quarter results alongside an upbeat outlook for the third quarter and the rest of the year as a whole. However, the stock hasn’t moved much on the news yet. It still has excellent upside potential, although its safety and timing are just fair right now.

Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!