Why Royal Caribbean Stock Is Skyrocketing This Week

Core Insights - Royal Caribbean Group reported record fourth-quarter earnings, with revenue and adjusted EPS growth of 13% and 72% respectively, despite missing Wall Street's Q4 earnings expectations [2] - The company projected double-digit sales and adjusted EPS growth for 2026, with capacity set to rise nearly 7% [2] - Record bookings were achieved at the start of 2026, marking the best seven booking weeks in the company's history [4] Financial Performance - Royal Caribbean's stock increased by 16% this week, reflecting positive market sentiment [2] - The company earned $6.3 billion in operating cash flow last year and expects to spend $1.8 billion on maintenance capex in 2026 [5] - The current market cap stands at $80 billion, with a gross margin of 39.53% and a dividend yield of 1.20% [3] Future Outlook - Management plans to double the fleet of Celebrity River Cruises ships to 20 by 2031 and invest $5 billion in new initiatives in 2026 [4] - The company experienced a 6% decline in net cruise costs (excluding fuel expenses) over the past year, enhancing profitability [4] - Royal Caribbean's stock is considered reasonably priced at roughly 22 times free cash flow relative to its enterprise value of $100 billion, especially given its growth plans [5]