Here's Why Royal Caribbean (RCL) is a Strong Value Stock

Zacks
03-11

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

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 is a Zacks Rank #2 (Buy) stock, with a Value Style Score of B and VGM Score of A. Shares are currently trading at a forward P/E of 13.9X for the current fiscal year compared to the Leisure and Recreation Services industry's P/E of 17.4X. Additionally, RCL has a PEG Ratio of 0.7 and a Price/Cash Flow ratio of 11.3X. Value investors should also note RCL's Price/Sales ratio of 3.4X.

Many value investors pay close attention to a company's earnings as well. For RCL, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.48 to $14.90 per share for 2025. Per share RCL boasts an average earnings surprise of 15.7%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding RCL to their portfolios.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

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