Eric Volkman, The Motley Fool
4 min read
Investors were more than eager to hop aboard Royal Caribbean‘s (NYSE:RCL) stock last month. The cruise company had fine potential going into its peak summer sailing season and took full advantage, as evidenced by its strong third-quarter results published near the end of the month. That was bookended by new, upbeat analyst takes, and the combination of these positive factors sent the stock to a monthly gain of nearly 16%.
Full speed ahead
In the run-up to that earnings release, which occurred four days shy of Halloween, several prognosticators made bullish adjustments to their Royal Caribbean takes. The most meaningful change came from Jefferies (NYSE:JEF), which upgraded its recommendation on the stock to buy from hold. It also lifted its price target to $330 per share from $305.
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According to reports, Jefferies wrote that it expects to post a higher net yield than previously estimated (net yield is essentially how much revenue, net of certain costs, a cruise operator earns per available berth on its ships). Jefferies has increased its forecast for Royal Caribbean’s 2027 net yield to 3.3%, up from 2.9%, citing higher occupancy and increased onboard spending.
That was a good call, because Royal Caribbean delivered the goods when it reported those third-quarter results on Oct. 27.
Revenue for the period rose by a robust 9% year over year to $5.6 billion, while non-GAAP (adjusted) net income cruised even higher with a 12% increase to $1.8 billion. The former was basically in line with analyst estimates, but the company notched a convincing beat on the collective pundit forecast for adjusted profitability.
While we’re on the subject of earnings beats, Royal Caribbean also topped the analyst consensus for full-year 2026 adjusted earnings per share (EPS). The company’s guidance for the metric, by the way, was raised to $17.85 to $17.95 per share, up satisfyingly from the previous range of $17.73 to $17.87.
Eager clientele
After those third-quarter figures were published, Royal Caribbean closed out October by receiving a series of price target raises from other analysts. Prognosticators from Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) were among those doing the raising, while Freedom Broker’s Manuchekhr Narzulloev took the extra step of upgrading his recommendation to buy from hold.
