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Royal Caribbean (RCL) Stock Falls Amid Market Uptick: What Investors Need to Know

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In the latest trading session, Royal Caribbean (RCL - Free Report) closed at $316.02, marking a -2.34% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.34%. Elsewhere, the Dow saw an upswing of 0.09%, while the tech-heavy Nasdaq appreciated by 0.42%.

Shares of the cruise operator have depreciated by 8.61% over the course of the past month, underperforming the Consumer Discretionary sector's loss of 0.7%, and the S&P 500's gain of 3.54%.

Investors will be eagerly watching for the performance of Royal Caribbean in its upcoming earnings disclosure. In that report, analysts expect Royal Caribbean to post earnings of $5.65 per share. This would mark year-over-year growth of 8.65%. Meanwhile, our latest consensus estimate is calling for revenue of $5.16 billion, up 5.64% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.63 per share and revenue of $17.98 billion. These totals would mark changes of +32.46% and +9.05%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Royal Caribbean. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.07% rise in the Zacks Consensus EPS estimate. Right now, Royal Caribbean possesses a Zacks Rank of #3 (Hold).

With respect to valuation, Royal Caribbean is currently being traded at a Forward P/E ratio of 20.7. This denotes a discount relative to the industry average Forward P/E of 20.79.

Also, we should mention that RCL has a PEG ratio of 0.91. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. 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 72, placing it within the top 30% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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