We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Reasons to Add Royal Caribbean (RCL) to Your Portfolio
Read MoreHide Full Article
With nearly 26 million passengers expected to sail this year and 26 new ships announced to debut, per Cruise Lines International Association (CLIA), 2017 might just prove to be the year for the cruise ships.
In fact, the demand for cruises is believed to remain strong throughout this year, thereby making it the right time to add a few cruise companies to your portfolio. Miami-based, Royal Caribbean Cruises Ltd. (RCL - Free Report) , one of the major players in the segment, is one such stock that is worth considering at the moment.
The stock has surged 71.7% in the last year, outperforming the industry’s gain of 31%. We believe that the momentum is likely to continue for this Zacks Rank #2 (Buy) company, going forward.
What Makes Royal Caribbean a Solid Pick?
Upbeat Q2 & Guidance: On Aug 1, the company posted solid second-quarter 2017 results with both earnings and revenues surpassing the Zacks Consensus Estimate. In fact, solid demand trends and continued cost discipline, resulted in the highest second-quarter earnings in the company’s history.
Reportedly, adjusted earnings per share (EPS) jumped a significant 56.9% from the year-ago tally of $1.09, owing to higher revenues and lower expenses. Revenues increased 4.3% year over year to $2.195 billion, driven by higher passenger ticket revenues as well as better onboard spending.
Consequently, this led to raised full-year 2017 guidance. Royal Caribbean now expects EPS in the band of $7.35 to $7.45 per share, up from $7–$7.20, guided earlier. Moreover, net yields are projected to increase in the range of 5.5% to 6%, on a constant currency basis, slightly up from the prior guidance of 4.5-6%.
Furthermore, Royal Caribbean’s booked position for the rest of 2017 continues to set new records and is ahead of the same time last year, in both rate and volume. The company thus remains positioned to witness another record year and achieve its targets under the Double-Double program. Launched in 2014, the program aims to double 2014 EPS by 2017, bring the company’s return on capital to double-digit percentages, improve revenue yields, control costs and moderate capacity growth.
Healthy Growth Prospects: While Royal Caribbean has had a historical EPS growth rate of 22.6% compared with the industry average of 17.7%, investors should really focus on its projected growth. Here, the company is looking to grow at a rate of 22.4%, much higher than the industry average of 13.6%. Meanwhile, its revenues for the year are anticipated to increase 3.2%.
Notably, these figures substantiate the company’s Growth Score of B on our style score system that helps us to identify potential outperformers.
Valuation Looks Reasonable: Royal Caribbean has a Value Score of B. This score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Currently, the company is trading at a trailing 12-months P/E multiple of 16.72 while the industry’s average stands at 22.08. Also, it is trading at a PEG – ratio of the P/E to the expected future earnings growth rate of 0.77x, much lower than the industry average of 1.64x.
These ratios deem Royal Caribbean undervalued in comparison with its industry peers, and indicate a good time to buy.
Earnings Surprise History & Positive Estimate Revisions: Royal Caribbean has an impressive earnings surprise history. Evidently, the company has outpaced the Zacks Consensus Estimate consistently in each of the trailing 10 quarters, delivering a positive average earnings surprise of 3.52% in the last four quarters.
Furthermore, upward estimate revisions reflect optimism in the stock’s prospects. The Zacks Consensus Estimate for Royal Caribbean’s current-quarter earnings has moved up 5.5%, reflecting seven upward revisions versus none downward, over the last 30 days. Also, current year’s earnings estimates have climbed 3.3%, on the back of eight upward revisions versus none in the opposite direction.
Favorable ROE: Royal Caribbean’s trailing 12-month return on equity (ROE) supports its growth potential. The company’s ROE of 13.51% has been consistently rising over past few years. Further, it compares favorably with the industry’s average ROE of 8.25%, reflecting the fact that it is efficient in using shareholders’ funds.
Moreover, Camping World, Town Sports and ILG have surpassed estimates in each of the trailing four quarters, recording an average positive surprise of 43.47%, 52.48% and 24.4%, respectively.
4 Surprising Tech Stocks to Keep an Eye on
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.
Image: Bigstock
5 Reasons to Add Royal Caribbean (RCL) to Your Portfolio
With nearly 26 million passengers expected to sail this year and 26 new ships announced to debut, per Cruise Lines International Association (CLIA), 2017 might just prove to be the year for the cruise ships.
In fact, the demand for cruises is believed to remain strong throughout this year, thereby making it the right time to add a few cruise companies to your portfolio. Miami-based, Royal Caribbean Cruises Ltd. (RCL - Free Report) , one of the major players in the segment, is one such stock that is worth considering at the moment.
The stock has surged 71.7% in the last year, outperforming the industry’s gain of 31%. We believe that the momentum is likely to continue for this Zacks Rank #2 (Buy) company, going forward.
What Makes Royal Caribbean a Solid Pick?
Upbeat Q2 & Guidance: On Aug 1, the company posted solid second-quarter 2017 results with both earnings and revenues surpassing the Zacks Consensus Estimate. In fact, solid demand trends and continued cost discipline, resulted in the highest second-quarter earnings in the company’s history.
Reportedly, adjusted earnings per share (EPS) jumped a significant 56.9% from the year-ago tally of $1.09, owing to higher revenues and lower expenses. Revenues increased 4.3% year over year to $2.195 billion, driven by higher passenger ticket revenues as well as better onboard spending.
Consequently, this led to raised full-year 2017 guidance. Royal Caribbean now expects EPS in the band of $7.35 to $7.45 per share, up from $7–$7.20, guided earlier. Moreover, net yields are projected to increase in the range of 5.5% to 6%, on a constant currency basis, slightly up from the prior guidance of 4.5-6%.
Furthermore, Royal Caribbean’s booked position for the rest of 2017 continues to set new records and is ahead of the same time last year, in both rate and volume.
The company thus remains positioned to witness another record year and achieve its targets under the Double-Double program. Launched in 2014, the program aims to double 2014 EPS by 2017, bring the company’s return on capital to double-digit percentages, improve revenue yields, control costs and moderate capacity growth.
Healthy Growth Prospects: While Royal Caribbean has had a historical EPS growth rate of 22.6% compared with the industry average of 17.7%, investors should really focus on its projected growth. Here, the company is looking to grow at a rate of 22.4%, much higher than the industry average of 13.6%. Meanwhile, its revenues for the year are anticipated to increase 3.2%.
Notably, these figures substantiate the company’s Growth Score of B on our style score system that helps us to identify potential outperformers.
Valuation Looks Reasonable: Royal Caribbean has a Value Score of B. This score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Currently, the company is trading at a trailing 12-months P/E multiple of 16.72 while the industry’s average stands at 22.08. Also, it is trading at a PEG – ratio of the P/E to the expected future earnings growth rate of 0.77x, much lower than the industry average of 1.64x.
These ratios deem Royal Caribbean undervalued in comparison with its industry peers, and indicate a good time to buy.
Earnings Surprise History & Positive Estimate Revisions: Royal Caribbean has an impressive earnings surprise history. Evidently, the company has outpaced the Zacks Consensus Estimate consistently in each of the trailing 10 quarters, delivering a positive average earnings surprise of 3.52% in the last four quarters.
Furthermore, upward estimate revisions reflect optimism in the stock’s prospects. The Zacks Consensus Estimate for Royal Caribbean’s current-quarter earnings has moved up 5.5%, reflecting seven upward revisions versus none downward, over the last 30 days. Also, current year’s earnings estimates have climbed 3.3%, on the back of eight upward revisions versus none in the opposite direction.
Favorable ROE: Royal Caribbean’s trailing 12-month return on equity (ROE) supports its growth potential. The company’s ROE of 13.51% has been consistently rising over past few years. Further, it compares favorably with the industry’s average ROE of 8.25%, reflecting the fact that it is efficient in using shareholders’ funds.
Key Picks
Some other top-ranked stocks in the industry include Camping World Holdings, Inc. (CWH - Free Report) , Town Sports International Holdings, Inc. and ILG Inc. . All of these companies carry the same bullish rank as Royal Caribbean. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, Camping World, Town Sports and ILG have surpassed estimates in each of the trailing four quarters, recording an average positive surprise of 43.47%, 52.48% and 24.4%, respectively.
4 Surprising Tech Stocks to Keep an Eye on
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.
See Stocks Now>>