We recently compiled a list of the 20 Most Profitable Stocks of the Last 20 Years. Royal Caribbean Cruises Ltd. stands eleventh among the most profitable stocks on our list. TheFly reported on January 23 that Goldman Sachs raised its price target for RCL to $310 from $275 while keeping a Buy rating. Despite conflicting cruise mood and competitive pressures, the firm outlined projections for 1.5%–3.5% net yield growth and at least $17.50 in EPS for 2026, which is driven by new ships, private destinations, ...

Core Viewpoint - Royal Caribbean's stock has surged due to a strong earnings outlook driven by record cruise bookings and positive demand for future cruises [1] Earnings Results - The company reported a fourth-quarter earnings rise that met Wall Street expectations, contributing to an optimistic full-year profit and revenue outlook [1] - The wave booking season has started strongly, indicating robust demand for cruises [1] Fleet Expansion - Royal Caribbean announced agreements with a shipyard in France to expand its fleet, including additions for river vessels [1]

Core Insights - Royal Caribbean reported an increase in fourth-quarter profit and revenue, driven by higher customer spending on onboard services [1] Financial Performance - The company experienced a rise in profit and revenue for the fourth quarter, indicating strong financial health and consumer demand [1] Customer Behavior - Customers are increasingly willing to spend more on onboard services, reflecting a positive trend in consumer spending within the cruise industry [1]

Financial Performance - Royal Caribbean Group reported 2025 Adjusted EPS of $15.64, exceeding guidance due to favorable revenue and joint venture performance [1]. - Total revenues for 2025 reached $17.9 billion, with a Net Income of $4.3 billion [4]. - Fourth quarter 2025 Net Income was $0.8 billion or $2.80 per share, compared to $0.4 billion or $1.63 per share in the prior year [6]. - Total revenues for Q4 2025 reached $4,259 million, a 13.2% increase from $3,761 million in Q4 2024 [52]. - Passenger ticket revenues increased to $2,937 million in Q4 2025, up 13% from $2,599 million in Q4 2024 [52]. - Onboard and other revenues rose to $1,323 million in Q4 2025, compared to $1,161 million in Q4 2024, marking a 14% increase [52]. - Operating income for the year ended December 31, 2025, was $4,910 million, a 19.6% increase from $4,106 million in 2024 [52]. - Comprehensive income attributable to Royal Caribbean Cruises Ltd. for the year ended December 31, 2025, was $4,466 million, compared to $2,750 million in 2024 [52]. - Net income for the year ended December 31, 2025, was $4,291 million, compared to $2,896 million in 2024, reflecting a 48% increase [60]. - Adjusted earnings per share for the year ended December 31, 2025, was $15.64, compared to $11.80 in 2024, reflecting a growth of 32.4% [69]. - Adjusted net income attributable to Royal Caribbean Cruises Ltd. for Q4 2025 was $762 million, compared to $445 million in Q4 2024, a rise of 71.1% [69]. Future Projections - The company expects 2026 Adjusted EPS to be between $17.70 and $18.10, indicating a CAGR of 23% over the first two years of its Perfecta program [10]. - The company targets a 20% compound annual growth rate in Adjusted EPS by the end of 2027 under its Perfecta Program [38]. - Net Yields for 2026 are projected to increase by 2.1% to 4.1% as-reported, with a 30 bps headwind from itinerary modifications in China [10]. - Capital expenditures for 2026 are expected to be around $5 billion, primarily for new ship orders [21]. Capacity and Expansion - Approximately two-thirds of 2026 capacity is booked at record rates, with onboard revenue pre-cruise purchases up year-over-year [8]. - The company plans to expand its vacation portfolio with the new Discovery Class ships and 10 additional ships for Celebrity River Cruises by 2031 [14]. - Royal Caribbean Group plans to expand its portfolio of private destinations from three to eight by 2028 [43]. - The company will enter river cruising in 2027 with Celebrity River Cruises, enhancing its market offerings [43]. Liquidity and Debt - As of December 31, 2025, the Group's liquidity position was $7.2 billion, including cash and undrawn credit facilities [19]. - Scheduled debt maturities for 2026 amount to $3.2 billion, with total maturities of $10.2 billion through 2030 [20]. - Royal Caribbean's long-term debt as of December 31, 2025, was $18,165 million, slightly down from $18,473 million in 2024 [58]. Operational Metrics - In Q4 2025, Royal Caribbean carried 2,484,241 passengers, a 15% increase from 2,159,429 in Q4 2024 [56]. - Passenger cruise days increased to 15,116,254 in Q4 2025, up from 13,678,795 in Q4 2024, representing an 11% growth [56]. - The total assets of Royal Caribbean as of December 31, 2025, reached $41,619 million, a 12% increase from $37,070 million in 2024 [58]. - Cash and cash equivalents at the end of 2025 were $825 million, up from $388 million in 2024, indicating a 113% increase [60]. - The company reported a net cash provided by operating activities of $6,465 million for the year ended December 31, 2025, compared to $5,265 million in 2024, a 23% increase [60]. Cost and Expenses - Total current liabilities increased to $12,055 million in 2025 from $9,817 million in 2024, a 23% rise [58]. - Total cruise operating expenses for Q4 2025 were $2,242 million, compared to $2,232 million in Q4 2024, reflecting a slight increase of 0.4% [67]. - Marketing, selling, and administrative expenses for Q4 2025 were $630 million, compared to $674 million in Q4 2024, a decrease of 6.5% [67]. - Gross cruise costs per APCD for Q4 2025 were $204.79, slightly down from $214.33 in Q4 2024, a decrease of 4.0% [67]. - Net cruise costs excluding fuel for the year ended December 31, 2025, were $6,803 million, compared to $6,440 million in 2024, an increase of 5.6% [67]. - Adjusted EBITDA for the year ended December 31, 2025, reached $7,025 million, compared to $5,971 million in 2024, indicating an increase of 17.7% [68]. - Adjusted gross margin per passenger cruise day (PCD) for the year ended December 31, 2025, was $249.24, up from $242.96 in 2024, a 2% increase [65]. - The company reported a gross margin of $1,564 million for Q4 2025, compared to $1,298 million in Q4 2024, marking a 21% increase [65].

Core Insights - Royal Caribbean Group reported a strong performance in 2025, with earnings per share (EPS) of $15.61 and adjusted EPS of $15.64, exceeding guidance due to favorable revenue and joint venture performance [1][4] - The company anticipates continued growth in 2026, projecting adjusted EPS between $17.70 and $18.10, representing a compound annual growth rate (CAGR) of 23% over the first two years of its Perfecta program [1][8] Financial Performance - For Q4 2025, net income was $0.8 billion or $2.76 per share, compared to $0.6 billion or $2.02 per share in Q4 2024, with adjusted net income also showing significant growth [6][8] - Total revenues for 2025 reached $17.9 billion, with adjusted EBITDA of $7.0 billion, indicating strong operational performance [8][49] Revenue and Yield Growth - Gross margin yields increased by 9.2% and net yields by 3.1% in Q4 2025 compared to Q4 2024, with a load factor of 108% [7][8] - The company expects net yields to increase by 2.1% to 4.1% in 2026, driven by higher capacity and anticipated yield growth [8][12] Capacity and Expansion Plans - Royal Caribbean is expanding its vacation portfolio with the introduction of the new Discovery Class ships and an additional 10 ships for Celebrity River Cruises, aiming to enhance guest experiences and long-term growth [3][14][15] - Capacity for 2026 is expected to increase by 6.7% compared to 2025, with further growth projected for 2027, 2028, and 2029 [8][24] Booking Trends and Onboard Revenue - The onset of the WAVE season has led to record booking weeks, with approximately two-thirds of 2026 capacity already booked at record rates [10] - Onboard revenue continues to exceed prior years, with nearly 50% of onboard revenue in 2025 booked pre-cruise, primarily through digital channels [10][11] Liquidity and Capital Expenditures - As of December 31, 2025, the company's liquidity position was $7.2 billion, including cash and undrawn credit facilities [20] - Capital expenditures for 2026 are projected to be around $5 billion, primarily related to new ship orders and private destination developments [22][23]

Core Insights - Celebrity River Cruises is expanding its fleet to 20 ships by 2031, with the first ship, Celebrity Compass, under construction [1][3] - The 2028 European sailing season is now open for booking, featuring over 160 sailings to more than 50 destinations, representing an 80% increase in destinations compared to 2027 [2][3] Fleet Expansion - The company has committed to building 10 new ships, which will significantly enhance its presence in the European river cruise market [1][3] - This expansion positions Celebrity River Cruises as one of the largest operators in the European river cruise sector [1] Booking and Itineraries - The 2028 season includes itineraries that cover 24 new ports, with unique experiences such as an overnight stay in Bucharest and themed cruises for tulip season and Christmas markets [4][5] - Specific itineraries include Lower Danube Cruises, Rhine River Cruises, Upper Danube Cruises, Dutch Tulip Season Cruises, and Christmas Markets Cruises, each offering distinct cultural and scenic experiences [8] Market Demand - The inaugural 2027 season sold out in under six minutes, indicating strong demand for Celebrity's river cruise offerings [3] - The expansion aims to meet this demand by providing more options for travelers to experience European rivers [3]

Core Insights - Royal Caribbean Group has announced agreements with Chantiers de l'Atlantique for the construction of its new Discovery Class ships, including two firm orders and options for four additional ships, with the first ship set to debut in 2029 and the second in 2032 [1][2] Group 1: Company Strategy and Vision - The Discovery Class ships are designed to enhance guest experiences through innovative design and immersive moments, showcasing the future of vacations [2][3] - Royal Caribbean Group aims to disrupt the vacation industry with bold offerings and innovative shipbuilding, leveraging a partnership with Chantiers de l'Atlantique [5] Group 2: Shipbuilding and Technology - Chantiers de l'Atlantique has a long-standing relationship with Royal Caribbean, having built 21 ships over the past four decades, and is currently constructing two additional ships [4] - The collaboration emphasizes sustainability and cutting-edge technology in shipbuilding, reinforcing Royal Caribbean's global shipbuilding network [7] Group 3: Future Developments - Royal Caribbean Group is expanding its vacation offerings, including a pipeline of ocean and river ships over the next three years and increasing its private destinations from three to eight by 2028 [6][9] - The company plans to enter river cruising in 2027 with Celebrity River Cruises, further diversifying its portfolio [9]

Core Viewpoint - The cruise operator is anticipated to encounter significant challenges in the near future [1] Group 1 - The cruise industry is facing potential difficulties due to various external factors [1] - Market conditions may lead to increased operational costs for cruise operators [1] - Consumer demand for cruises may fluctuate, impacting revenue projections [1]

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Key Takeaways RCL will report Q4 results Jan. 29, with EPS projected at $2.81 and revenues near $4.27B.Royal Caribbean's Q4 revenues likely rose on ~10% capacity growth from new ships and fewer dry dock days.RCL benefited from yield gains, higher onboard spending via digital channels and lower net cruise costs.Royal Caribbean Cruises Ltd. (RCL) is scheduled to report fourth-quarter 2025 results on Jan. 29, before the opening bell.RCL’s earnings beat the Zacks Consensus Estimate in each of the trailing four ...