Is Royal Caribbean Stock a Buy After a 13% Drop in 2 Days?

Core Viewpoint - Royal Caribbean reported better-than-expected third-quarter results and raised its full-year outlook, but the stock experienced a significant decline, indicating a shift in market sentiment despite strong performance metrics [1][2]. Financial Performance - Revenue for the third quarter increased by 5% to $5.14 billion, which is the weakest quarterly growth in over four years and slightly below analyst expectations of $5.17 billion [5]. - The adjusted net income rose by 11% to $5.75 per share, surpassing Wall Street's target of $5.68 per share, continuing a trend of exceeding market expectations since the post-pandemic recovery [7]. - Royal Caribbean has consistently raised its full-year earnings guidance following each quarterly update, reflecting a positive outlook despite some near-term concerns [8]. Market Reaction - Following the financial update, Royal Caribbean's shares dropped by 13% over two trading days, with several analysts reducing their price targets, indicating a cooling sentiment among Wall Street professionals [2][3]. - Despite the recent pullback, the stock has performed well over the past five years, being a five-bagger with a 33% increase over the past year, raising questions about whether this decline presents a buying opportunity [3].