Is RCL Stock Worth Buying After Its Strong 2026 Earnings Outlook?

RCL Raises Its 2026 Earnings Expectations

Royal Caribbean now expects adjusted earnings per share of $17.73-$17.87 for 2026. That implies expected year-over-year growth of 14%, supported by stronger second-quarter performance and a better outlook for the balance of the year.

Revenues are expected to grow 9% in 2026. Capacity is projected to increase 6.6%, while constant-currency net yields are expected to rise 1.75-2.25%.

Royal Caribbean Delivers Another Earnings Beat

Second-quarter adjusted earnings were $4.21 per share, beating the Zacks Consensus Estimate by 6.1%. Revenues of $4.83 billion topped expectations by 0.5%.

Close-in demand was better than expected, particularly in the Caribbean. Lower-than-expected costs and favorable joint-venture performance also helped the company exceed guidance.

RCL Trades Above Key Industry Valuations

RCL trades at 4.23X forward 12-month sales, above the Zacks sub-industry’s 2.74X. That premium leaves less room for disappointment.

The $339 price target is based on a 4.44X forward sales multiple. Against the reported share price of $322.50, that points to only moderate upside.

Carnival Corporation Ltd. CCL and Norwegian Cruise Line Holdings Ltd. NCLH remain useful peer references for investors comparing cruise demand, fuel exposure and balance-sheet repair across the industry. RCL’s premium multiple suggests investors are already assigning it credit for stronger execution.

Royal Caribbean Faces Margin and Cost Pressure

The second quarter was not clean across every line item. Net income attributable to Royal Caribbean fell 6.8% year over year, adjusted net income declined 6% and adjusted EBITDA slipped 1.1%.

Adjusted EBITDA margin contracted to 37.9% from 40.8%. Payroll and fuel expenses increased, and 2026 capital expenditures are expected to be approximately $4.7 billion, keeping the business capital intensive.

RCL Carries Material Financial Commitments

Royal Caribbean ended the second quarter with total debt of $23.4 billion. Scheduled debt maturities include $2.7 billion in 2027 and $3.4 billion in 2028.

The company also had approximately $12.8 billion of remaining contractual ship purchase obligations. These commitments are balanced by $6.9 billion of liquidity, improving operating cash flow and leverage below three times.

RCL’s Scores Support Patience Over Aggressive Buying

The bottom line is that RCL looks like a stronger company than a straightforward bargain. Earnings expectations are rising, demand remains durable and the stock has momentum, but valuation and execution risks argue against aggressive buying at current levels.

The stock currently carries a Zacks Rank #3 (Hold). That rank fits a mixed setup where positive estimate activity and business momentum are offset by premium valuation and sizable financial commitments.

RCL has a Momentum Score of A and a VGM Score of B, reflecting favorable price strength and a balanced overall style profile. Its Value Score of C and Growth Score of C temper the bullish case, suggesting investors may be better served by patience than chasing the stock after its run.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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