Why Royal Caribbean Stock Is Skyrocketing This Week
Key Points
Royal Caribbean just reported record fourth-quarter earnings.
Its guidance was even better, however, projecting double-digit sales and earnings growth in 2026.
Despite growing sales by 9% in 2026, net cruise costs (excluding fuel) declined by 6%, showing streamlining efficiencies.
- 10 stocks we like better than Royal Caribbean Cruises ›
Shares of leading global cruise company Royal Caribbean Group (NYSE: RCL) are up 16% this week as of 2 p.m. ET on Thursday. The world's second-largest cruise provider reported record fourth-quarter earnings, leaving the market to take an optimistic view about the company's future. While Royal Caribbean technically "missed" Wall Street's Q4 earnings expectations, revenue and adjusted earnings per share (EPS) grew by 13% and 72%, respectively, during the quarter as the company realized streamlining efficiencies. However, what really stole the show was Royal Caribbean's 2026 guidance, where management projected double-digit sales and adjusted EPS growth, with capacity set to rise nearly 7%.
Is Royal Caribbean's future as bright as its Q4 results?
In addition to this stellar guidance, Chief Executive Officer Jason Liberty announced, "We experienced the best seven booking weeks in the company's history since the last earnings call," highlighting the unprecedented demand Royal Caribbean is seeing at the start of 2026. These record bookings follow a year in which net cruise costs (excluding fuel expenses) declined by 6%, creating an undeniably powerful one-two punch for the cruise line operator. Buoyed by these results, the company announced plans to double its fleet of Celebrity River Cruises ships to 20 by 2031 and to spend $5 billion on new initiatives in 2026 to capitalize on its growing demand.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
Best yet for investors, Royal Caribbean's stock has more than quintupled since the 2020 crash, yet it doesn't appear outrageously priced today. Royal Caribbean earned $6.3 billion in operating cash flow last year. Management expects to spend $1.8 billion on maintenance capex in 2026. This means that if Royal Caribbean quit building new ships (which we don't want it to, of course; this is just a valuation exercise), it would trade at roughly 22 times free cash flow (FCF) relative to its enterprise value of $100 billion. That is a pretty reasonable price compared to the broader market, especially given the company's plans for double-digit sales and earnings growth next year. That said, prospective investors need to embrace Royal Caribbean's cyclicality before buying.
Should you buy stock in Royal Caribbean Cruises right now?
Before you buy stock in Royal Caribbean Cruises, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Royal Caribbean Cruises wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $456,457!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,174,057!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 197% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of January 29, 2026.
Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
