Royal Caribbean Cruises stock hits record highs with strong momentum, but valuation concerns raised.

From Yahoo Finance: 2025-07-01 12:13:00

The S&P 500 closed at a record high, generating a 10.57% return in the second quarter, with Royal Caribbean Cruises (RCL) stock up 1.2% on Monday, reaching $316. The stock has gained over 100% in the past year, hitting 52-week highs 46 times, showing strong momentum but raised valuation concerns.

Analysts expect RCL to earn $15.42 a share in 2025 and $17.66 in 2026, with a current share price of $316.99 trading at 20.6 times its forward 2025 EPS. RCL stock has never traded above $150 before the pandemic, with a mean target price of $275, 13% lower than its current price.

Oil prices impact RCL’s operating expenses, with a barrel of WTI reaching a five-year high of $114.84 in 2022. In 2024, Royal Caribbean paid $1.07 billion for fuel, accounting for 7.0% of its revenue, impacting operating margins. Analysts remain bullish on RCL, rating it a Buy despite potential oil price fluctuations.

Royal Caribbean reported strong Q1 2025 earnings, with an upward revision to its annual guidance, expecting to grow earnings per share to $15.05. Bookings for 2025 are on track, showing strong demand, positioning RCL as a top cruise stock option. The net yield increased by 3.5% in 2025, contributing to profitability and growth prospects.

For investors considering RCL stock, valuation, oil prices, and demand for cruising are key factors to assess. While the stock has shown significant growth and momentum, potential external factors like oil price fluctuations could impact its future performance. Despite strong demand and profitability, careful consideration is advised before investing in RCL.



Read more at Yahoo Finance: Royal Caribbean Cruises Jumps Into the Top 100 Stocks to Buy. Should You Bite?