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Royal Caribbean (RCL) Rises 118% in a Year: Here's How
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Royal Caribbean Cruises Ltd. (RCL - Free Report) has done exceedingly well and emerged as an attractive investment option. This is quite evident from the stock’s performance in a year. In the said period, the stock has surged 117.6% compared with the industry’s growth of 12.1%.
We believe there is still momentum left in this Zacks Rank #1 (Strong Buy) stock, which is quite evident from its 2023 and 2024 earnings estimates growth of 57.7% and 13.7% year over year, respectively. Moreover, in the past 30 days, earnings estimates for 2023 and 2024 have witnessed upward revisions of 1.1% and 0.4%, respectively.
Catalysts Driving Growth
The company's booking volume has maintained a growing pace in third-quarter 2023, with momentum seen in 2023 and notably in 2024 sailings. Booking volumes in the third quarter were much higher than in the same period in 2019. It reported solid bookings concerning North American and European sailings. It stated a rise in consumer spending onboard and pre-cruise purchases. It revealed that the metrics surpassed 2019 levels, courtesy of greater participation at higher prices. In third-quarter 2023, load factors were 110%.
The company stated that the momentum will continue into 2024, with booked load factors and rates surpassing those of all previous years. As of Sep 30, RCL had $5 billion in customer deposits compared with $4.2 billion as of Dec 31, 2022. Given the full fleet resumption and load factors at high prices, the company expects customer deposits to return to typical seasonality in the upcoming periods. In 2023, the company anticipates solid guest generation from the North America region.
Image Source: Zacks Investment Research
The company focuses on new innovative ships and onboard experiences to differentiate its offerings, as well as deliver superior yields and margins. In the first half of 2023, RCL unveiled three new ships that align with its strategy and are poised to generate higher yields from 2024 onward. In August 2023, Silversea introduced Silver Nova, the first of the new Evolution class. In the fourth quarter of 2023, RCL intends to take delivery of Icon of the Seas and Celebrity Ascent. As of Sep 30, 2023, the company had 56 new ships on order that are to be delivered through 2028.
For 2024, RCL is planning to unveil Utopia of the Seas in the middle of the year. Utopia marks the first Oasis-class ship dedicated to short Caribbean cruises, aligning with the company's strategy to compete against land-based vacation options and attract new-to-cruise travelers, thus narrowing the value gap.
Royal Caribbean continues to make use of digital tools for marketing and product development and to enhance the consumer experience. These include revamped websites, new vacation packaging capabilities, support for mobile apps and increased bandwidth onboard to help its guests remain well-connected while at sea. With busier customers preferring more digital devices that help to save time, the introduction of superior Internet bandwidth and online check-in accompanied by radio-frequency identification technology should continue to increase occupancy.
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 37.5% on average. Shares of LYV have gained 17.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 28.6% and 132.8%, respectively, from the year-ago period’s levels.
Stride, Inc. (LRN - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 44.3% on average. Shares of LRN have gained 88.4% in the past year.
The Zacks Consensus Estimate for LRN’s 2024 sales and EPS indicates a rise of 9.1% and 34.7%, respectively, from the year-ago period’s levels.
Acushnet Holdings Corp. (GOLF - Free Report) carries a Zacks Rank #2 (Buy). GOLF has a trailing four-quarter earnings surprise of 49.9% on average. Shares of GOLF have surged 26.3% in the past year.
The Zacks Consensus Estimate for GOLF’s 2023 sales and earnings per share (EPS) indicates a rise of 5.8% and 7.6%, respectively, from the year-ago period’s levels.
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Royal Caribbean (RCL) Rises 118% in a Year: Here's How
Royal Caribbean Cruises Ltd. (RCL - Free Report) has done exceedingly well and emerged as an attractive investment option. This is quite evident from the stock’s performance in a year. In the said period, the stock has surged 117.6% compared with the industry’s growth of 12.1%.
We believe there is still momentum left in this Zacks Rank #1 (Strong Buy) stock, which is quite evident from its 2023 and 2024 earnings estimates growth of 57.7% and 13.7% year over year, respectively. Moreover, in the past 30 days, earnings estimates for 2023 and 2024 have witnessed upward revisions of 1.1% and 0.4%, respectively.
Catalysts Driving Growth
The company's booking volume has maintained a growing pace in third-quarter 2023, with momentum seen in 2023 and notably in 2024 sailings. Booking volumes in the third quarter were much higher than in the same period in 2019. It reported solid bookings concerning North American and European sailings. It stated a rise in consumer spending onboard and pre-cruise purchases. It revealed that the metrics surpassed 2019 levels, courtesy of greater participation at higher prices. In third-quarter 2023, load factors were 110%.
The company stated that the momentum will continue into 2024, with booked load factors and rates surpassing those of all previous years. As of Sep 30, RCL had $5 billion in customer deposits compared with $4.2 billion as of Dec 31, 2022. Given the full fleet resumption and load factors at high prices, the company expects customer deposits to return to typical seasonality in the upcoming periods. In 2023, the company anticipates solid guest generation from the North America region.
Image Source: Zacks Investment Research
The company focuses on new innovative ships and onboard experiences to differentiate its offerings, as well as deliver superior yields and margins. In the first half of 2023, RCL unveiled three new ships that align with its strategy and are poised to generate higher yields from 2024 onward. In August 2023, Silversea introduced Silver Nova, the first of the new Evolution class. In the fourth quarter of 2023, RCL intends to take delivery of Icon of the Seas and Celebrity Ascent. As of Sep 30, 2023, the company had 56 new ships on order that are to be delivered through 2028.
For 2024, RCL is planning to unveil Utopia of the Seas in the middle of the year. Utopia marks the first Oasis-class ship dedicated to short Caribbean cruises, aligning with the company's strategy to compete against land-based vacation options and attract new-to-cruise travelers, thus narrowing the value gap.
Royal Caribbean continues to make use of digital tools for marketing and product development and to enhance the consumer experience. These include revamped websites, new vacation packaging capabilities, support for mobile apps and increased bandwidth onboard to help its guests remain well-connected while at sea. With busier customers preferring more digital devices that help to save time, the introduction of superior Internet bandwidth and online check-in accompanied by radio-frequency identification technology should continue to increase occupancy.
Other Key Picks
Here are some other top-ranked stocks from the Zacks Consumer Discretionary sector:
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 37.5% on average. Shares of LYV have gained 17.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 28.6% and 132.8%, respectively, from the year-ago period’s levels.
Stride, Inc. (LRN - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 44.3% on average. Shares of LRN have gained 88.4% in the past year.
The Zacks Consensus Estimate for LRN’s 2024 sales and EPS indicates a rise of 9.1% and 34.7%, respectively, from the year-ago period’s levels.
Acushnet Holdings Corp. (GOLF - Free Report) carries a Zacks Rank #2 (Buy). GOLF has a trailing four-quarter earnings surprise of 49.9% on average. Shares of GOLF have surged 26.3% in the past year.
The Zacks Consensus Estimate for GOLF’s 2023 sales and earnings per share (EPS) indicates a rise of 5.8% and 7.6%, respectively, from the year-ago period’s levels.