Why Royal Caribbean (RCL) is a Top Value Stock for the Long-Term

Zacks
02-21

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

Royal Caribbean (RCL)

Based in Miami and incorporated in 1985, Royal Caribbean Cruises is a cruise company. It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, it has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises.

RCL sits at a Zacks Rank #2 (Buy), holds a Value Style Score of B, and has a VGM Score of A. Compared to the Leisure and Recreation Services industry's P/E of 20.6X, shares of Royal Caribbean are trading at a forward P/E of 16.4X. RCL also has a PEG Ratio of 0.9, a Price/Cash Flow ratio of 13.3X, and a Price/Sales ratio of 4X.

A company's earnings performance is important for value investors as well. For fiscal 2025, seven analysts revised their earnings estimate higher in the last 60 days for RCL, while the Zacks Consensus Estimate has increased $0.47 to $14.89 per share. RCL also holds an average earnings surprise of 15.7%.

Investors should take the time to consider RCL for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.

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