Group 1 - Carnival Corporation & plc (NYSE:CCL) is identified as one of the best cheap stocks to buy for 2026, with TD Cowen raising its price target from $35 to $38 while maintaining a Buy rating [1] - Despite near-term challenges in the cruise market, fundamental demand for cruises remains strong, and capacity trends are expected to be constructive through fiscal year 2029 [3] - Carnival reported record annual operating income of $4.5 billion for the fiscal year ended November 30, 2025, which is approximately 25% higher than FY2024 [4] Group 2 - The company achieved full-year revenues of $26.6 billion, net income of $2.8 billion, and adjusted net income of about $3.1 billion, all of which are new highs [5] - Adjusted EBITDA reached $7.2 billion, exceeding 2024 levels by more than $1 billion, prompting the board to reinstate a quarterly dividend of $0.15 per share [5] - Management raised its earnings outlook, projecting adjusted net income of approximately $3.5 billion for the coming year, with return on invested capital expected to exceed 13.5% [5]

Theme parks and cruises have overtaken television as Disney’s biggest source of profits, and the company is counting on them to fuel its growth for the rest of this decade and beyond.Read more: https://t.co/lJhY1mMu13 https://t.co/vguLLenexz ...

Summary of Global Hotels & Leisure Conference Call Industry Overview - The conference call discusses the impact of current dollar weakness on the Global Hotels & Leisure industry, particularly focusing on companies with significant international revenue exposure and those with costs denominated in different currencies. Key Points Winners from Dollar Weakness 1. **Booking Holdings (BKNG)**: - Beneficiary of dollar weakness with nearly 80% of room nights outside the US, particularly benefiting from strong Euro against the USD [2][12] - Earnings estimates increased by 2-3% due to favorable FX impact [1] 2. **Airbnb (ABNB)**: - 55% of revenues earned outside the US, with 33% exposure to Europe and 11% each to APAC and LATAM, leading to a positive earnings tailwind from USD weakness [3][12] - Earnings estimates raised by 2-3% [1] 3. **Carnival Corporation (CCL)**: - 45% of revenues generated outside the US, primarily in Europe, benefiting from favorable currency translation [3][12] - Earnings estimates increased by 2-3% [1] 4. **Other Beneficiaries**: - Hilton, Marriott, IHG, and Royal Caribbean (RCL) will also see benefits, but to a lesser extent due to limited non-USD exposure [3] Losers from Dollar Weakness 1. **Accor**: - Despite only 3% of room exposure in the US, approximately 35% of EBITDA is generated in USD while reporting in EUR, leading to a negative impact from dollar weakness [4][14] - Earnings estimates trimmed by ~3% [1] 2. **Hyatt**: - Managed resorts in the Mexican Caribbean earn revenues in USD but have costs in Mexican Pesos, leading to margin compression due to dollar weakness [5][14] - Incentive management fees are sensitive to USD/MXN exchange rates, resulting in a 3-4% headwind to earnings for 2026-2027 [5][15] Financial Implications - The overall impact of dollar weakness is expected to create a material earnings tailwind for US-denominated stocks with high non-US revenue exposure, while negatively affecting those with significant USD costs and EUR-denominated earnings [1][11] - The dollar is down MSD-high teens year-over-year against major currencies, which will have a significant impact on the earnings of companies in the travel sector [9] Investment Ratings - Despite the FX impacts, the investment ratings remain unchanged with Outperform ratings for Marriott, Hyatt, Accor, Melia, Royal Caribbean, and Airbnb [8] Additional Insights - The analysis highlights the importance of currency exposure in the hospitality sector, emphasizing that companies with significant international operations are better positioned to benefit from a weaker dollar [11][20] - The sensitivity of earnings to currency fluctuations is a critical factor for investors to consider when evaluating these companies [14][15] This summary encapsulates the key insights from the conference call regarding the impact of dollar weakness on the Global Hotels & Leisure industry, identifying both winners and losers, and providing a financial outlook for the affected companies.

Core Insights - Royal Caribbean Cruises Ltd. (RCL) has entered 2026 with strong momentum, achieving the best seven booking weeks in its history, indicating sustained cruise demand for the upcoming year [1][5] Booking Performance - Approximately two-thirds of RCL's 2026 capacity is already booked, with load factors consistent with historical norms but at record pricing levels, suggesting robust demand that can absorb capacity while maintaining pricing power [2][11] - RCL's record booking streak is seen as a confirmation of structural demand strength rather than a temporary post-pandemic rebound, supported by solid visibility and disciplined capacity growth [5] New Hardware Impact - New ships like Star of the Seas and Celebrity Xcel are exceeding expectations, while the debut of Legend of the Seas in Europe is generating strong bookings, enhancing the overall experience and attracting additional demand [3][11] Consumer Behavior - Travelers are prioritizing experiences, with many planning to increase leisure spending, making cruises an attractive value proposition compared to land-based vacations [4] Competitive Landscape - RCL's booking performance is notably stronger than its competitors, such as Carnival Corporation and Norwegian Cruise Line Holdings, which face challenges in pricing discipline and scale [6][8] - Carnival has reported solid booking volumes but is more sensitive to capacity additions, while Norwegian benefits from premium positioning but has a narrower fleet mix compared to RCL [7][8] Financial Performance - RCL shares have increased by 16.9% over the past three months, outperforming the industry growth of 4.5% [9] - The forward price-to-earnings ratio for RCL is 18.08X, above the industry average of 17.18X, indicating a premium valuation [13] - The Zacks Consensus Estimate for RCL's 2026 earnings and sales suggests a year-over-year increase of 13.3% and 9.1%, respectively [14]

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]

Core Insights - Royal Caribbean Cruises Ltd. (RCL) reported fourth-quarter 2025 results with adjusted earnings and revenues missing the Zacks Consensus Estimate, but both metrics increased year-over-year. The stock rose 6.2% in pre-market trading due to strong guidance for 2026 [1][9]. Financial Performance - In Q4 2025, RCL reported adjusted earnings per share (EPS) of $2.80, missing the consensus estimate of $2.81, compared to $1.63 in the prior-year quarter [4]. - Quarterly revenues were $4,259 million, below the consensus estimate of $4,269 million, but up 13.2% year-over-year from $3.76 billion [4]. - Passenger ticket revenues reached $2.94 billion, up from $2.6 billion in the prior-year quarter, while onboard and other revenues increased to $1.32 billion from $1.16 billion [5]. - Total cruise operating expenses were $2.24 billion, a 9.3% increase year-over-year [5]. Booking and Demand Trends - RCL has seen record booking momentum, with about two-thirds of 2026 sailings already booked at higher prices, reflecting strong demand [9][10]. - The company experienced the seven strongest booking weeks in its history, driven by strong Cyber Sales and a solid start to the WAVE season [10]. - Spending trends are also improving, with onboard and pre-cruise purchases outpacing prior years, indicating higher guest participation and pricing [11]. Future Outlook - For Q1 2026, RCL expects adjusted EPS to be in the range of $3.18-$3.28, with the Zacks Consensus Estimate at $3.00 per share [13]. - The company anticipates net yields to increase by 2.4-2.9% on a reported basis year-over-year [14]. - For 2026, adjusted EPS is projected to be between $15.41 and $15.55, lower than the previous expectation of $17.70-$18.10, with the Zacks Consensus Estimate at $17.72 [15]. Strategic Initiatives - RCL is increasing investments in next-generation vacation offerings, including the launch of new Discovery Class ships and the expansion of Celebrity River Cruises [3]. - The rollout of five new exclusive destinations by 2028 aims to deepen the company's appeal and expand its addressable market [3].

Financial Data and Key Metrics Changes - In 2025, the company achieved nearly $18 billion in total revenue, with a 33% year-over-year earnings growth and a record 9.4 million vacations delivered [5][9] - Adjusted earnings per share (EPS) for the fourth quarter was $2.80, exceeding guidance, while full-year adjusted EPS grew 33% to $15.64 [9][22] - Operating cash flow reached nearly $6.5 billion, with $2 billion returned to shareholders through dividends and share buybacks [5][23] Business Line Data and Key Metrics Changes - The fourth quarter saw net yields grow by 2.5% on a constant currency basis, driven by both new and existing hardware [21][22] - Total revenue growth in the fourth quarter was 13%, with adjusted EBITDA growing by 17.6% to just over $7 billion [22][23] - The company announced a commitment for 10 additional ships for Celebrity River Cruises, expanding its fleet to 20 vessels by 2031 [7][17] Market Data and Key Metrics Changes - The Caribbean represents 57% of the company's capacity, with yields growing 35% since 2019, and continued yield growth is expected in 2026 [25][26] - European sailings are performing well, with strong demand from both American and European consumers, despite a decrease in capacity in the first half of the year due to dry dock timing [27] - Alaska is expected to account for 5% of total capacity, with a 3% increase compared to last year [27] Company Strategy and Development Direction - The company is focused on creating a lifetime of vacations for guests by strengthening its ecosystem, which includes differentiated experiences, world-class brands, and exclusive destinations [15][16] - Investments in technology and AI are aimed at enhancing guest experiences and operational efficiency, with a 25% year-over-year increase in active users on the app in the fourth quarter [17][18] - The company aims for moderate capacity growth of 6.7% in 2026, with revenue expected to increase by double digits year-over-year [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong consumer demand and loyalty, with a significant percentage of guests planning to increase leisure travel spending [12][13] - The company anticipates achieving its Perfecta financial targets by 2027, with adjusted EPS expected to be in the range of $17.70-$18.10 for 2026, representing a 14% year-over-year increase [15][31] - The management highlighted the importance of maintaining price integrity in the Caribbean market despite increased capacity [88] Other Important Information - The company is expanding its private destination portfolio, with Royal Beach Club Paradise Island opening in December and receiving positive guest feedback [16][63] - The introduction of Discovery Class ships is expected to redefine guest experiences, although specific details are yet to be disclosed [76][77] - The company plans to invest $5 billion in strategic growth initiatives while maintaining an investment-grade balance sheet [31][32] Q&A Session Summary Question: Can you elaborate on the further acceleration and momentum into 2026? - Management noted strong consumer demand and loyalty, with capacity growing 6.7% and an increase in high-quality demand due to loyalty programs [40][41] Question: What is the current state of the Caribbean market regarding pricing and capacity? - Management indicated strong demand trends in the Caribbean across all brands, with pricing higher than last year despite concerns about capacity increases [53][55] Question: How does the company view organic versus inorganic growth? - Management stated that about half of the yield growth will come from new hardware, with the other half from like-for-like improvements [60] Question: Can you discuss the net yield cadence for the year? - Management highlighted that dry dock timing and the ramp-up of Royal Beach Club will impact yield cadence throughout the year [71] Question: What is the outlook for net cruise costs? - Management expects net cruise costs to remain low due to economies of scale and effective cost management strategies [80]

Financial Data and Key Metrics Changes - In 2025, the company achieved nearly $18 billion in total revenue, with a 33% year-over-year earnings growth and a record 9.4 million vacations delivered [5][9] - Adjusted earnings per share (EPS) for the fourth quarter was $2.80, exceeding guidance, while full-year adjusted EPS grew 33% to $15.64 [9][21] - Operating cash flow for the year was approximately $6.5 billion, with $2 billion returned to shareholders through dividends and share buybacks [5][22] Business Line Data and Key Metrics Changes - The fourth quarter saw net yields grow by 2.5% on a constant currency basis, driven by a 10% capacity growth [20][21] - Total revenue growth in the fourth quarter was 13%, with adjusted EBITDA increasing by 17.6% to just over $7 billion [21][22] - The company is expanding its Celebrity River Cruises fleet with a commitment for 10 additional ships, increasing the fleet to 20 vessels by 2031 [7][16] Market Data and Key Metrics Changes - The Caribbean represents 57% of the company's capacity, with yields growing 35% since 2019, and continued yield growth is expected in 2026 [24][26] - European sailings are performing well, with strong demand from both American and European consumers, accounting for 15% of capacity [25] - Alaska is expected to account for 5% of total capacity, with a 3% increase compared to last year [25] Company Strategy and Development Direction - The company is focused on creating a lifetime of vacations for guests by enhancing its vacation ecosystem through differentiated experiences, exclusive destinations, and technological investments [14][15] - The introduction of the new Discovery Class ships aims to redefine guest experiences and expand the company's market presence [8][75] - Investments in AI and disruptive technologies are seen as foundational advantages that improve guest experiences and operational efficiency [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets, with a strong start to 2026 and record booking rates [10][11] - The company anticipates double-digit revenue growth in 2026, with adjusted EPS expected to be in the range of $17.70-$18.10, representing a 14% year-over-year increase [14][29] - Management noted that consumer demand remains strong, with 40% of consumers planning to increase leisure travel spending in the next year [12] Other Important Information - The company is committed to investing $5 billion in strategic growth initiatives while maintaining an investment-grade balance sheet [30] - The Royal Beach Club Paradise Island opened in December and has received positive guest feedback, reinforcing the importance of exclusive destination experiences [15][61] Q&A Session Summary Question: Can you elaborate on the further acceleration and momentum into 2026? - Management noted strong consumer demand and loyalty program enhancements, leading to increased bookings and a positive outlook for market share growth in the $2 trillion vacation market [37][39] Question: What is the current state of the Caribbean market regarding pricing and capacity? - Management indicated strong demand trends in the Caribbean, with pricing higher than the previous year, despite concerns about increased capacity [48][52] Question: How does the company view the balance between organic and inorganic growth? - Management stated that half of the yield growth will come from new hardware, with the other half from like-for-like improvements, emphasizing the importance of both growth strategies [56][58] Question: Can you provide insights on the new Discovery Class ships? - Management expressed excitement about the Discovery Class, indicating it will be a game changer, but refrained from providing specific details at this time [74][75] Question: What is the outlook for net cruise costs? - Management expects net cruise costs to remain low due to operational efficiencies and the scale of the business, while also leveraging disruptive technologies for cost management [77][78]

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 - Norwegian Cruise Line Holdings Ltd. (NCLH) has experienced significant stock underperformance compared to broader market indices, with a notable decline following mixed earnings results for Q3 2025, raising concerns about investor confidence and future growth potential [2][4]. Company Overview - Founded in 1966, NCLH is based in Miami, Florida, and operates as a cruise company with a market capitalization of $9.5 billion, managing brands such as Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises [1]. Stock Performance - NCLH stock has declined 21% over the past 52 weeks and 6.5% year-to-date (YTD), while the S&P 500 Index has returned 16.1% and increased by 1.9% in 2026 [2]. - The stock has also underperformed the State Street Consumer Discretionary Select Sector SPDR ETF (XLY), which rose by 6.1% over the past year and 2.8% this year [3]. Earnings Results - In Q3 2025, NCLH reported revenue of $2.94 billion, which fell short of market expectations, although adjusted EPS was $1.20, exceeding Wall Street estimates [4]. - For the fiscal year ending December 2025, analysts project a 17.1% year-over-year growth in adjusted EPS to $1.92, with a mixed earnings surprise history [5]. Analyst Ratings - NCLH has a consensus "Moderate Buy" rating, with 13 "Strong Buys" and 10 "Holds" among 23 analysts covering the stock [5]. - Recent trends show a slight bearish shift, with "Strong Buy" ratings decreasing from 15 to 13 over the past two months [6]. - J.P. Morgan analyst Matthew Boss maintains a "Buy" rating with a price target of $28, indicating a potential upside of 31.3% from current prices, while the highest target of $40 suggests a possible rise of 91.8% [6].