RCL Stock Forecast & Price Target

Royal Caribbean Group has demonstrated a notable improvement in financial performance, with Return on Capital (ROC) rising from 13.80% to 15.40% over the last twelve months (LTM), and a forecasted increase to 18.03% in the near-term future (NTM). Additionally, net sales revenue for the twelve months ending June 2025 is projected to grow by 12.10% year-over-year, increasing from $15.33 billion to $17.18 billion. Furthermore, the company's Economic Profit (EP) has surged by 31.64% year-over-year, climbing from $1.19 billion to $1.57 billion during the LTM, indicating strong operational efficiency and profitability.

Royal Caribbean's financial outlook is marred by several adverse factors, including a loss of earnings per share (EPS) guidance due to adverse weather and political unrest, as reflected in a headwind of $0.05 to FY25 EPS estimates. Additionally, the company has downgraded its unit cost growth expectations for FY25 and anticipates only “anemic” cost growth for FY26, which raises concerns about sustained profitability amidst significant capacity expansion. Finally, anticipated yield impacts from new ship deliveries in 2H25 add further pressure, as these new vessels could lower load factors during their ramp-up periods, contributing to a bearish sentiment among investors.