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Royal Caribbean (RCL) Ascends But Remains Behind Market: Some Facts to Note

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In the latest market close, Royal Caribbean (RCL - Free Report) reached $136.02, with a +0.73% movement compared to the previous day. The stock fell short of the S&P 500, which registered a gain of 1.11% for the day. On the other hand, the Dow registered a gain of 0.8%, and the technology-centric Nasdaq increased by 1.24%.

The the stock of cruise operator has risen by 8.6% in the past month, leading the Consumer Discretionary sector's loss of 1.14% and the S&P 500's gain of 0.48%.

The upcoming earnings release of Royal Caribbean will be of great interest to investors. The company is forecasted to report an EPS of $1.30, showcasing a 665.22% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $3.64 billion, indicating a 26.27% growth compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $10.01 per share and a revenue of $15.94 billion, indicating changes of +47.86% and +14.69%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Royal Caribbean. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, Royal Caribbean holds a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Royal Caribbean is presently being traded at a Forward P/E ratio of 13.49. This expresses a discount compared to the average Forward P/E of 16.33 of its industry.

One should further note that RCL currently holds a PEG ratio of 0.49. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Leisure and Recreation Services industry held an average PEG ratio of 1.26.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 158, placing it within the bottom 38% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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