Royal Caribbean (RCL) Target Raised to $425 on Earnings Momentum

Core Insights - Tigress Financial raised its price target on Royal Caribbean Cruises Ltd. to $425 from $415, maintaining a Buy rating, citing a multi-year growth trajectory with record revenue, earnings, and cash flow generation for 2025 [1] Financial Performance - For 2026, management projects double-digit revenue growth, net yield growth of 1.5%–3.5%, and capacity expansion of 6.7%. Adjusted EPS is expected to be between $17.70 and $18.10, indicating approximately 14% year-over-year growth at the midpoint, while adjusted EBITDA is anticipated to approach $8.0 billion with margins just above 40%. Operating cash flow is forecasted to exceed $7.0 billion [3] - In 2025, total revenue reached nearly $18 billion, an increase of 8.8% year-over-year, while adjusted EPS rose by 33% to $15.64 [3] Shareholder Returns and Financial Health - Royal Caribbean returned $2.0 billion to shareholders through dividends and repurchases, ending the quarter with $7.2 billion in liquidity and leverage below 3x, achieving investment-grade metrics. This combination of earnings acceleration, balance sheet strength, and disciplined capital returns supports a compelling long-term investment case [4] Company Overview - Founded in 1985 and headquartered in Miami, Florida, Royal Caribbean Cruises Ltd. is recognized as one of the best cruise stocks to buy currently, offering diversified itineraries and innovative vessels through its portfolio of global cruise brands [5]