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RCL Targets Adjusted EPS in the $20 Range for 2027: Can Momentum Last?
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Key Takeaways
RCL aims for adjusted EPS in the $20 range in 2027 under Perfecta, supported by bookings and efficiencies.
Royal Caribbean's 2027 bookings rose in the high teens, with capacity expected to grow 4.5% next year.
Fuel costs and roughly 200 basis points of first-quarter 2027 yield headwinds could challenge RCL's EPS goal.
Royal Caribbean Cruises Ltd. (RCL - Free Report) is pursuing adjusted earnings per share (EPS) in the $20 range in 2027 under its Perfecta program, supported by stronger bookings, capacity expansion and operating efficiencies. In its third-quarter 2026 update, the company reiterated that it remained on track for the objective based on the current forward fuel-price curve.
The earnings objective is supported by improving demand indicators. In its third-quarter update, Royal Caribbean reported mid-teens year-over-year growth in recent booking volumes, while bookings for 2027 sailings rose in the high teens. Booked positions for both 2026 and 2027 were ahead of the prior year at record rates. Stronger close-in demand and onboard revenues, particularly in Europe and the Caribbean, supported third-quarter net yield growth of 0.6% in constant currency.
The 2027 capacity outlook provides another foundation for growth. Royal Caribbean expects capacity to increase 4.5%, supported by new ships and fewer drydock capacity days. Hero of the Seas and the introduction of Celebrity River Cruises will likely expand its vacation offerings. Cost performance also supports the profitability case, with full-year 2026 net cruise costs excluding fuel expected to remain approximately flat in constant currency.
The earnings trajectory remains sensitive to fuel prices and the timing of yield growth. First-quarter 2027 yields face approximately 200 basis points of structural headwinds, including drydock timing, with yield growth expected to be weighted toward the second half. Royal Caribbean indicated that it would exceed its 2027 earnings target by approximately $1 per share at the spot fuel price prevailing when Perfecta was announced, underscoring the effect of higher energy costs.
Royal Caribbean’s upward revision to its 2026 adjusted EPS guidance of $17.85-$17.95, implying approximately 14% year-over-year growth, provides a stronger earnings base heading into 2027. Reaching its $20-range adjusted EPS objective will likely depend on converting booking strength and capacity expansion into profitable revenue growth. Pricing strength and operating efficiency could support that progress, while fuel costs and first-quarter yield headwinds remain key considerations.
RCL’s Price Performance, Valuation & Estimates
Shares of Royal Caribbean have gained 6.2% in the past three months against the industry’s 0.8% slip. In the same time frame, other industry players like Carnival Corporation Ltd. (CCL - Free Report) have gained 6.6%, while Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has lost 3.4%.
RCL Stock’s Three-Month Price Performance
Image Source: Zacks Investment Research
RCL stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 16.39, below the industry average of 17.53. Then again, other industry players, such as Carnival and Norwegian Cruise, have P/E ratios of 11.68 and 13.93, respectively.
RCL’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Royal Caribbean’s 2027 earnings per share has increased from $20.11 to $20.30 over the past 30 days.
EPS Trend of RCL Stock
Image Source: Zacks Investment Research
The company’s 2027 earnings are likely to increase 13.3% year over year. Conversely, industry players like Carnival are likely to witness growth of 12.7% year over year in fiscal 2027 earnings. NCLH is likely to project a fall of 12.6% year over year in 2027 earnings.
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RCL Targets Adjusted EPS in the $20 Range for 2027: Can Momentum Last?
Key Takeaways
Royal Caribbean Cruises Ltd. (RCL - Free Report) is pursuing adjusted earnings per share (EPS) in the $20 range in 2027 under its Perfecta program, supported by stronger bookings, capacity expansion and operating efficiencies. In its third-quarter 2026 update, the company reiterated that it remained on track for the objective based on the current forward fuel-price curve.
The earnings objective is supported by improving demand indicators. In its third-quarter update, Royal Caribbean reported mid-teens year-over-year growth in recent booking volumes, while bookings for 2027 sailings rose in the high teens. Booked positions for both 2026 and 2027 were ahead of the prior year at record rates. Stronger close-in demand and onboard revenues, particularly in Europe and the Caribbean, supported third-quarter net yield growth of 0.6% in constant currency.
The 2027 capacity outlook provides another foundation for growth. Royal Caribbean expects capacity to increase 4.5%, supported by new ships and fewer drydock capacity days. Hero of the Seas and the introduction of Celebrity River Cruises will likely expand its vacation offerings. Cost performance also supports the profitability case, with full-year 2026 net cruise costs excluding fuel expected to remain approximately flat in constant currency.
The earnings trajectory remains sensitive to fuel prices and the timing of yield growth. First-quarter 2027 yields face approximately 200 basis points of structural headwinds, including drydock timing, with yield growth expected to be weighted toward the second half. Royal Caribbean indicated that it would exceed its 2027 earnings target by approximately $1 per share at the spot fuel price prevailing when Perfecta was announced, underscoring the effect of higher energy costs.
Royal Caribbean’s upward revision to its 2026 adjusted EPS guidance of $17.85-$17.95, implying approximately 14% year-over-year growth, provides a stronger earnings base heading into 2027. Reaching its $20-range adjusted EPS objective will likely depend on converting booking strength and capacity expansion into profitable revenue growth. Pricing strength and operating efficiency could support that progress, while fuel costs and first-quarter yield headwinds remain key considerations.
RCL’s Price Performance, Valuation & Estimates
Shares of Royal Caribbean have gained 6.2% in the past three months against the industry’s 0.8% slip. In the same time frame, other industry players like Carnival Corporation Ltd. (CCL - Free Report) have gained 6.6%, while Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has lost 3.4%.
RCL Stock’s Three-Month Price Performance
Image Source: Zacks Investment Research
RCL stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 16.39, below the industry average of 17.53. Then again, other industry players, such as Carnival and Norwegian Cruise, have P/E ratios of 11.68 and 13.93, respectively.
RCL’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Royal Caribbean’s 2027 earnings per share has increased from $20.11 to $20.30 over the past 30 days.
EPS Trend of RCL Stock
Image Source: Zacks Investment Research
The company’s 2027 earnings are likely to increase 13.3% year over year. Conversely, industry players like Carnival are likely to witness growth of 12.7% year over year in fiscal 2027 earnings. NCLH is likely to project a fall of 12.6% year over year in 2027 earnings.
RCL stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.