Back to top

Is Royal Caribbean (RCL) Stock Undervalued Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Royal Caribbean (RCL - Free Report) is a stock many investors are watching right now. RCL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.59. This compares to its industry's average Forward P/E of 14.30. Over the past year, RCL's Forward P/E has been as high as 15.40 and as low as 9.12, with a median of 11.90.

Investors will also notice that RCL has a PEG ratio of 0.77. 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. RCL's industry currently sports an average PEG of 0.94. RCL's PEG has been as high as 0.85 and as low as 0.55, with a median of 0.72, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Royal Caribbean is likely undervalued currently. And when considering the strength of its earnings outlook, RCL sticks out at as one of the market's strongest value stocks.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Royal Caribbean Cruises Ltd. (RCL) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in