Royal Caribbean (RCL) Stock Sinks As Market Gains: Here's Why

Company Performance - Royal Caribbean's stock closed at $259.27, reflecting a -2.45% change from the previous day's closing price, underperforming the S&P 500 which gained 0.11% [1] - The stock has increased by 3.56% over the past month, outperforming the Consumer Discretionary sector's gain of 0.05% and the S&P 500's gain of 0.08% [1] Earnings Expectations - The upcoming earnings report is expected to show an EPS of $2.8, representing a 71.78% increase compared to the same quarter last year, with revenue anticipated at $4.27 billion, a 13.43% increase year-over-year [2] - For the full year, analysts project earnings of $15.64 per share and revenue of $17.94 billion, indicating changes of +32.54% and +8.85% respectively from the previous year [3] Analyst Estimates and Rankings - Recent changes in analyst estimates are crucial as they reflect short-term business trends, with positive revisions indicating a favorable outlook on business health and profitability [4] - The Zacks Rank system, which integrates estimate changes, currently ranks Royal Caribbean at 3 (Hold), with a slight 0.01% decrease in the consensus EPS estimate over the past month [6] Valuation Metrics - Royal Caribbean's Forward P/E ratio stands at 17, which is lower than the industry average of 17.45, suggesting the company is trading at a discount compared to its peers [7] - The company has a PEG ratio of 0.8, compared to the industry average PEG ratio of 1.21, indicating a favorable earnings growth trajectory relative to its valuation [8] Industry Context - The Leisure and Recreation Services industry, part of the Consumer Discretionary sector, holds a Zacks Industry Rank of 87, placing it in the top 36% of over 250 industries, with top-rated industries outperforming lower-rated ones by a factor of 2 to 1 [9]