Royal Caribbean's (RCL +1.04%) stock has been sailing over the past 12 months, up nearly 50%. The cruise line has become one of the most compelling growth stories in the consumer discretionary sector.
NYSE: RCL
Key Data Points
Yes, cruises are cyclical, but Royal Caribbean has positioned itself for long-term success. As the cruise line's next earnings report date approaches at the end of April, investors should consider climbing aboard.
First and foremost, 2025 was a solid year for Royal Caribbean, as its stock rose nearly 21%, outpacing the S&P 500. The company's full-year 2025 net income was up an impressive 32% year over year, and the company reported that two-thirds of its 2026 capacity was already booked. This is a record-setting pace for the vacation experience provider.
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Royal Caribbean is targeting a 20% compound annual growth rate (CAGR) in adjusted earnings per share through 2027. Royal Caribbean aims to be more innovative than its competitors and has positioned itself as offering a more luxurious experience than rival Carnival.
NYSE: CCL
Key Data Points
Through new exclusive offerings and higher-paying customers, Royal Caribbean has a real competitive moat. The stock is fairly priced right now; its trailing and forward P/E ratios are in the low to mid-teens. Royal Caribbean also recently raised its quarterly cash dividend to $1.50 per share.
Although oil prices have presented some choppier waters recently, the fuel situation doesn't seem to be substantial enough to sink Royal Caribbean's momentum. Investors shouldn't be nervous about the cyclical nature of cruise lines because Royal Caribbean has created an ecosystem of fun.
