Key Takeaways RCL will report Q4 results Jan. 29, with EPS projected at $2.81 and revenues near $4.27B.Royal Caribbean's Q4 revenues likely rose on ~10% capacity growth from new ships and fewer dry dock days.RCL benefited from yield gains, higher onboard spending via digital channels and lower net cruise costs.Royal Caribbean Cruises Ltd. (RCL) is scheduled to report fourth-quarter 2025 results on Jan. 29, before the opening bell.RCL’s earnings beat the Zacks Consensus Estimate in each of the trailing four ...

Core Insights - Carnival Corporation & plc (CCL) has resumed its quarterly dividend of 15 cents per share, indicating a shift from balance sheet repair to capital returns, following a period of suspension due to the pandemic [1][7] - The decision comes after CCL closed fiscal 2025 with record revenues, EBITDA, and net income, contributing over $3 billion to the bottom line, driven by strong pricing, resilient onboard spending, and disciplined cost control [2][4] Financial Performance - CCL achieved a net debt-to-EBITDA ratio of 3.4, ahead of its deleveraging timeline, having reduced total debt by over $10 billion in less than three years [2][7] - The company projects EBITDA to exceed $7.6 billion in the absence of new ship deliveries in 2026, allowing it to fund dividends while continuing to deleverage towards a sub-3X leverage target [3][7] Market Position - CCL's stock has declined 3.5% over the past three months, outperforming the industry average decline of 4.3%, while competitors like Royal Caribbean and Norwegian Cruise Line have seen larger drops [5] - Currently, CCL is trading at a forward 12-month price-to-earnings (P/E) multiple of 11.29, significantly below the industry average of 16.3, indicating a potential undervaluation [8] Analyst Sentiment - The Zacks Consensus Estimate for CCL's fiscal 2026 earnings per share has been revised upward from $2.72 to $2.77, reflecting strong analyst confidence in the stock's near-term prospects [9][12]

Industry Overview - The cruise industry is experiencing strong demand and increased booking volumes, particularly in North America and Europe, with solid pricing and onboard spending contributing positively [1] - AAA projects that the number of Americans traveling on ocean cruises will reach a record high of 21.7 million by 2026, reflecting a year-over-year increase of 4.5% [2] - Cruise operators are investing in new hardware, including mega-ships and private destinations, to attract new customers [2] Company Insights Royal Caribbean Cruises Ltd. (RCL) - RCL is benefiting from robust booking trends and strong consumer spending onboard, with a focus on digital investment, fleet expansion, and enhancing guest experiences [6][9] - The company plans to debut the Legend of the Seas in 2026 and has secured shipbuilding slots through a long-term agreement with Meyer Turku, including a confirmed order for Icon 5 scheduled for delivery in 2028 [7][8] - RCL has an expected revenue growth rate of 9.3% and an earnings growth rate of 14.1% for the current year, with earnings estimates improving by 0.01% over the last 60 days [9] Carnival Corp. & plc (CCL) - CCL is experiencing sustained demand and increased booking volumes, with yields increasing by 5.5% during fiscal 2025, exceeding management's guidance [12][15] - The company is approximately two-thirds booked at historically high prices and expects this momentum to continue into fiscal 2026, projecting double-digit earnings growth [13][14] - CCL has an expected revenue growth rate of 4.2% and an earnings growth rate of 12.4% for the current year, with earnings estimates increasing by 5.4% over the last 30 days [15] Norwegian Cruise Line Holdings Ltd. (NCLH) - NCLH is benefiting from strong consumer demand and a solid booking environment, focusing on strategic investments in destination enhancements and luxury fleet upgrades [17] - The company forecasts net yield growth of approximately 3.5% to 4% in the fourth quarter, leveraging data analytics for personalized pre-cruise interactions [18] - NCLH has an expected revenue growth rate of 10.2% and an earnings growth rate of 26.9% for the current year, with earnings estimates improving by 0.8% over the last 30 days [19]

Core Insights - The groundbreaking ceremony for the new Cruise Terminal G at PortMiami marks a significant investment in Miami's future and aims to enhance the city's position as the Cruise Capital of the World [1][6][7] Investment and Infrastructure - The total investment for the Cruise Terminal G project is $345 million, designed to accommodate up to 7,000 passengers and includes a multi-level parking garage and intermodal facility [2][4] - The terminal will be built to meet LEED certification standards, focusing on energy efficiency and advanced technology [2][5] Economic Impact - The project is expected to create jobs and drive economic growth, contributing significantly to the local economy, which already benefits from PortMiami's annual contribution of $61 billion [7][8] - The new terminal will enhance the existing terminal infrastructure and support the growing demand for large cruise ships, including Royal Caribbean's Icon-class vessels [4][6] Architectural and Operational Features - Cruise Terminal G will feature iconic architecture that contributes to the evolving skyline of PortMiami, aligning with trends in waterfront structures [6] - The terminal is designed for efficient embarkation and disembarkation, providing a seamless experience for cruise passengers [4][7]

Core Viewpoint - The article compares Carnival and Viking Holdings as investment options in the cruise industry, highlighting their market positions, financial performance, and growth potential. Carnival - Carnival holds a 42% market share in the cruise industry, making it a generalist brand catering to a broad audience, which includes budget-friendly options [3] - The company faced significant challenges during the pandemic, leading to heavy borrowing and a slow recovery to pre-pandemic revenue levels, but has since seen a resurgence in demand with occupancy rates at 105% [4] - In fiscal 2025, Carnival generated $2.6 billion in free cash flow and reduced its total debt by approximately $800 million, although its total debt remains high at $25.8 billion [5] - The stock has increased by 30% over the past year and is currently valued at a P/E ratio of 16, which is lower than its competitors, suggesting potential for further growth [7] Viking Holdings - Viking has a much smaller market share of 0.8% but claims 4.2% of industry revenue, focusing on luxury experiences and educational offerings [2] - The company has a total debt of around $5.4 billion, which is considered manageable given its book value of the same amount [11] - Viking generated $674 million in free cash flow over the last year, although this has decreased as the company invests in new ships to meet high demand [12] - The stock has appreciated by 70% over the past year, with a higher P/E ratio of 35, reflecting its premium positioning and recession-resistant business model [13] Investment Considerations - Investors seeking safety may prefer Carnival due to its low P/E ratio and significant market share, alongside strong booking trends and effective debt management [14] - Conversely, those willing to take on more risk might find Viking's growth potential appealing, as its business model is less susceptible to economic downturns and its smaller ships allow access to more destinations [15]

Core Insights - Carnival Corporation & plc (CCL) is trading at a forward 12-month price-to-earnings (P/E) ratio of 12.94x, which is below the industry average of 17.18x and the broader consumer discretionary sector's 18.39x [1] - CCL's shares have increased by 35.4% over the past year, outperforming the industry's growth of 8.8% [4] - The company has recorded strong bookings for 2026 and 2027, with two-thirds of 2026 already booked at high prices, indicating robust demand despite weak consumer sentiment [8] Valuation and Performance - CCL's forward P/E ratio is lower than its peers, even as its stock price surged [6] - The company achieved record revenues, EBITDA, and operating income in 2025 while maintaining unit cost growth below expectations [9] - CCL's operating and EBITDA margins expanded significantly year over year, with a return on invested capital exceeding 13%, the highest in nearly two decades [9] Demand and Pricing - Demand and pricing momentum are key tailwinds, with record bookings and strong customer deposits reinforcing confidence in future demand [8] - Higher close-in demand and robust onboard spending have positively impacted yields, with expectations for further same-ship yield growth in 2026 [8] Financial Health - CCL has reduced debt by over $10 billion from peak levels and achieved an investment-grade leverage ratio, allowing for dividend resumption and potential share repurchases [10] - The company is focusing on disciplined reinvestment in destinations to enhance guest experience and create long-term revenue upside [10] Cost Pressures - Cost inflation is a concern, with management guiding for cruise costs (excluding fuel) to rise about 3.25% year over year due to persistent inflation and increased expenses [11] - Regulatory costs are also increasing, particularly in Europe, which could impact earnings despite strong operational momentum [12] Industry Dynamics - There is industry capacity pressure, especially in the Caribbean, with double-digit capacity growth creating a tougher pricing environment [14] - CCL's guidance suggests more modest yield growth compared to recent years, indicating diminishing pricing leverage [14] Earnings Estimates - Projections indicate a 9.8% rise in fiscal 2026 earnings, with Zacks Consensus Estimates showing earnings per share of 2.47 for the current year and 2.76 for the next year [15][16] - Other industry players are expected to see higher earnings growth, with Norwegian Cruise, OneSpaWorld, and Royal Caribbean projected to increase by 26.9%, 14.7%, and 14.5% respectively in 2026 [18]

Core Insights - Royal Caribbean has officially opened the Royal Beach Club Paradise Island, an all-inclusive beach club destination in The Bahamas, which welcomed its first guests on December 23, 2025 [1] - The beach club features a variety of experiences catering to different vacationer preferences, including family-friendly areas, party zones, and relaxation spots [3][4] Group 1: Beach Club Features - The Royal Beach Club offers two pristine beaches and three pools, including The Floating Flamingo, the world's largest swim-up bar, and areas designed for family fun and relaxation [3][6] - Guests can enjoy unlimited food and drinks from three beach grills and ten waterfront bars, along with amenities such as umbrellas, lounge chairs, and Wi-Fi included in the day pass [3][5] Group 2: Economic and Cultural Impact - Developed through a public-private partnership with the Bahamian government, the beach club supports local businesses and creates hundreds of jobs, showcasing Bahamian culture through architecture, entertainment, and cuisine [5] - The beach club aims to enhance the vacation experience in The Bahamas, responding to guest feedback for more diverse vacation options [4] Group 3: Future Developments - Royal Beach Club Paradise Island is the first of several upcoming destinations, with plans for additional beach clubs in Cozumel, Santorini, Lelepa, and Mexico by 2027 [7]

Core Insights - Carnival Corporation & plc (CCL) demonstrated improved revenue flow-through in fiscal 2025, with operating income per available lower berth day reaching its highest level in nearly two decades, indicating effective conversion of revenue growth into profitability [1][7]. Revenue and Profitability - The improvement in profitability is attributed to Carnival's operating model, where a significant portion of ship-level expenses is fixed once vessels are deployed. As occupancy, pricing, and onboard spending increased, costs were distributed over a larger revenue base, leading to meaningful margin expansion despite higher dry-dock activities and inflationary pressures [2][4]. - Ongoing sourcing efficiencies, operational discipline, and scale benefits contributed to the company's performance, with cruise costs excluding fuel rising at a measured pace relative to revenue growth, allowing for stronger operating performance [3][4]. Future Outlook - The enhanced ability to convert revenues into profitability is expected to support a more balanced earnings profile for Carnival. The company’s efficiency in generating higher profitability from its existing fleet is becoming increasingly evident as revenues grow on a controlled cost base [4]. Stock Performance and Valuation - CCL shares have increased by 9.8% over the past three months, outperforming the industry growth of 2.5%. In contrast, competitors like Royal Caribbean and Norwegian Cruise Line have seen declines of 11% and 5.6%, respectively [5]. - CCL is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 12.62, significantly below the industry average of 17.18, indicating a potential undervaluation compared to peers [9]. - The Zacks Consensus Estimate for Carnival's fiscal 2025 earnings per share has been revised upward from $2.40 to $2.47, reflecting strong analyst confidence in the stock's near-term prospects [12].

Company Overview - Royal Caribbean Cruises Ltd. (RCL) has a market capitalization of $77.2 billion and operates a diverse portfolio of brands, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises, targeting both mass-market and luxury travelers [1] Earnings Expectations - Analysts anticipate RCL will report a profit of $2.79 per share for fiscal Q4 2025, representing a 71.2% increase from $1.63 per share in the same quarter last year [2] - For the current fiscal year ending in December, RCL is expected to report a profit of $15.64 per share, up 32.5% from $11.80 per share in fiscal 2024, with further growth projected to $17.91 per share in fiscal 2026, a 14.5% year-over-year increase [3] Stock Performance - RCL shares have increased by 23.7% over the past 52 weeks, outperforming the S&P 500 Index's 16.9% return and the State Street Consumer Discretionary Select Sector SPDR ETF's 6.9% increase during the same period [4] Recent Developments - On December 11, RCL shares rose by 7.4% following the announcement of a new $2 billion share buyback program and a quarterly dividend of $1.00 per share. Additionally, consumer spending related to cruises increased by 11.2% year-over-year in November, despite a general decline in overall travel spending [5] Analyst Ratings - Wall Street analysts maintain a "Moderate Buy" rating for RCL, with 17 out of 25 analysts recommending "Strong Buy," one suggesting "Moderate Buy," and seven indicating "Hold." The mean price target for RCL is $330, suggesting a potential upside of 16.5% from current levels [6]

Core Insights - Royal Caribbean Cruises has demonstrated exemplary returns for shareholders over the past five years, distinguishing itself in a challenging industry [1] - The company has ambitious plans to sustain its growth momentum and has been selected as the first stock in a new investment portfolio for 2026 [2] Strategy and Financial Goals - Royal Caribbean's strategy focuses on moderate capacity growth, yield growth, and disciplined cost control to enhance shareholder value [4] - The company aims for an average annual growth rate of 20% in earnings per share from now until 2027, while maintaining a high investment-grade bond rating to control financing costs [5] Fleet Expansion and New Destinations - The company is launching an ambitious schedule of new cruise ships, including the Star of the Seas and Celebrity Xcel in 2025, and several others through 2028, catering to a diverse range of travelers [6][8] - Royal Caribbean plans to expand its exclusive destination resorts, adding new locations such as Royal Beach Club resorts in the Bahamas and Mexico, and properties in Chile for expeditions to Antarctica [8] Investment Appeal - The strong business execution of Royal Caribbean, particularly its successful strategy prior to the pandemic, positions the company favorably for future growth [11]