Miami-based Royal Caribbean Cruises Ltd. (RCL) operates as a global cruise vacation company. With a market cap of $46.3 billion, the company operates cruise brands like Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises and holds interest in TUI Cruises, Pullmantur and SkySea Cruises. It is expected to release its Q3 earnings before the market opens on Tuesday, Oct. 29.

Ahead of the event, analysts expect Royal Caribbean Cruises to report a profit of $5.05 per share, up 31.2% from $3.85 per share reported in the year-ago quarter. Moreover, it has surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew 76.4% year-over-year to $3.21, exceeding the consensus estimates by 15.9%.

For fiscal 2024, analysts expect RCL to report an adjusted EPS of $11.63, up 71.8% from $6.77 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 15.7% year-over-year to $13.45.

RCL has gained 41.6% on a YTD basis, substantially outperforming the S&P 500 Index’s ($SPX) 20.6% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 10.2% returns during the same time frame.

Despite surpassing Wall Street’s expectations, Royal Caribbean’s stock plunged 7.6% after its Q2 earnings release on Jul. 25. The company reported an impressive 16.7% year-over-year revenue growth, amounting to $4.1 billion. Additionally, its net income attributable to shareholders surged 86.1% to $854 million.

While these numbers were strong, investors seemed wary of the 4.9% rise in gross cruise costs per available passenger cruise day. The ongoing economic uncertainty also likely contributed to the market's negative reaction.

Despite these concerns, Royal Caribbean remained optimistic, raising its full-year adjusted EPS guidance to $11.35 to $11.45 range, representing a massive 68% annual growth. Interestingly, after the initial decline, RCL stock rebounded, staying in the green for the subsequent three trading sessions.

The consensus opinion on RCL stock is strongly bullish, with an overall “Strong Buy” rating. Out of the 18 analysts, 14 recommend “Strong Buy,” one suggests “Moderate Buy,” and three advise “Hold” rating.

The mean price target of $189.16 suggests a potential upside of 3.1% from current price levels.

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On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.