Royal Caribbean earnings beat lifts analyst consensus to Moderate Buy
Shares jump 5.7% on strong second quarter results, with Wall Street mean price target set at $353.38 despite rating downgrade from Strong Buy
Royal Caribbean Cruises Ltd. has secured a "Moderate Buy" consensus rating from Wall Street analysts following a robust second quarter 2026 performance that saw adjusted earnings per share beat estimates and full-year profit guidance raised. The Miami-based cruise giant, which holds a market capitalisation of $82.1 billion, reported adjusted EPS of $4.21, surpassing the consensus estimate of $3.98. Revenue also climbed 6.5 per cent year-on-year to $4.83 billion, slightly exceeding expectations.
The company lifted its adjusted EPS guidance for the fiscal year ending in December 2026 to a range of $17.73 to $17.87, implying 14 per cent year-on-year growth. This outlook aligns with the company's "Perfecta" strategic program, which targets a 20 per cent earnings compound annual growth rate from 2024 through 2027. Management noted that the first two years of the program are projected to deliver a 23 per cent CAGR, with a return on invested capital aimed at the high teens by 2027.
Royal Caribbean shares rose 5.7 per cent on July 28, 2026, after the release of results that highlighted resilient consumer demand and robust onboard spending. These factors helped offset rising fuel expenses, supported by strong last-minute bookings and improved cost efficiencies. For the current fiscal year, analysts expect adjusted EPS to grow 13.8 per cent to $17.79.
Despite the positive quarterly results, the stock has underperformed the broader market over the past year. Royal Caribbean shares have declined 1.6 per cent over this period, while the S&P 500 Index has rallied 20.2 per cent. However, the stock has gained 10.4 per cent year-to-date, narrowing the gap with the benchmark's 13.2 per cent return. The cruise operator also lagged the State Street Consumer Discretionary Select Sector SPDR ETF, which gained 4 per cent over the past 52 weeks.
Among the 26 analysts covering the stock, the consensus has shifted from "Strong Buy" to "Moderate Buy" over the past month. The current rating distribution includes 17 "Strong Buy" ratings, one "Moderate Buy," and eight "Holds." Bernstein analyst Richard Clarke maintained a "Buy" rating on August 12, 2026, setting a price target of $355. The mean price target across the street is $353.38, representing a 14.7 per cent premium to current levels, with a high of $425 implying 38 per cent upside.
