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Royal Caribbean (RCL) Ascends While Market Falls: Some Facts to Note

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The latest trading session saw Royal Caribbean (RCL - Free Report) ending at $230.76, denoting a +0.54% adjustment from its last day's close. This change outpaced the S&P 500's 0.09% loss on the day. On the other hand, the Dow registered a gain of 0.04%, and the technology-centric Nasdaq decreased by 0.1%.

Shares of the cruise operator witnessed a loss of 2.69% over the previous month, trailing the performance of the Consumer Discretionary sector with its gain of 0.69% and the S&P 500's loss of 0.29%.

The investment community will be closely monitoring the performance of Royal Caribbean in its forthcoming earnings report. The company is predicted to post an EPS of $1.49, indicating a 19.2% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $3.77 billion, up 13.2% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $11.65 per share and a revenue of $16.49 billion, indicating changes of +72.08% and +18.67%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Royal Caribbean. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.03% upward. Currently, Royal Caribbean is carrying a Zacks Rank of #2 (Buy).

Looking at its valuation, Royal Caribbean is holding a Forward P/E ratio of 19.71. Its industry sports an average Forward P/E of 22.5, so one might conclude that Royal Caribbean is trading at a discount comparatively.

Investors should also note that RCL has a PEG ratio of 0.61 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Leisure and Recreation Services industry had an average PEG ratio of 0.97 as trading concluded yesterday.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 27, which puts it in the top 11% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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