Published on 22 May 2024 on Zacks via Yahoo Finance
Royal Caribbean (RCL) Gains on Robust Booking & Ship Addition
Royal Caribbean Cruises Ltd. RCL is well poised to benefit from strong cruising demand from new and loyal guests and robust booking trends. Also, the addition of new ships bodes well for the company. RCL is also focusing on introducing new products and experiences, including private destinations, to fuel growth.Buoyed by such strengths, shares of the company have soared 43.6% compared with the industry’s 14.4% growth in the past six months. The Zacks Consensus Estimate for the company’s earnings and sales in 2024 indicate growth of 16.6% and 61.9% year over year, respectively. This highlights analysts’ confidence in the stock.
Delving Deeper
During the first quarter, the company reported solid booking volumes concerning all key itineraries. It stated a rise in consumer spending onboard and pre-cruise purchases. The company continues to be in a record-booked position, surpassing prior-year levels, courtesy of greater participation at higher prices. In the first quarter of 2024, load factors were 107%. The company is highly optimistic about the demand and pricing landscape for 2024.Looking ahead at the remainder of 2024, the outlook appears highly promising, characterized by strong yield and earnings growth. With the projected 60% earnings growth, 2024 is anticipated to be a record-breaking year, in line with the company's strategic objectives. As of Mar 31, 2024, RCL had $6 billion in customer deposits compared with $5.3 billion as of Dec 31, 2023.The company is focused on introducing innovative ships and unique onboard experiences to differentiate its offerings, aiming to achieve superior yields and margins. In 2023, RCL launched three new ships aligned with this strategy, expected to generate higher yields from 2024 onward. In the first quarter of 2024, the company reported strong performance, with Icon of the Seas particularly noted for high demand and pricing.For 2024, the company expects an 8.5% year-over-year capacity increase with the introduction of Utopia of the Seas and Silver Ray. These new vessels enhance vacation experiences and attract new customers, driving yield improvements and overall profitability. Utopia of the Seas, the seventh Oasis-class ship, is anticipated to offer the ultimate weekend getaway experience.