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The fair value estimate on Royal Caribbean Cruises has moved to $362.04 per share from $331.04. That shift largely traces back to how analysts are rethinking cruise demand trends, pricing power, and regional risks. Recent Street research shows both higher and lower price targets, with bullish views leaning on resilient booking and spending data, and cautious views pointing to Caribbean yield pressure and geopolitical uncertainty. Read on to see how you can keep track of these changing assumptions and stay updated on the evolving narrative around the stock.
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🐂 Bullish Takeaways
Several firms, including Wells Fargo, BofA, TD Cowen, Morgan Stanley, Goldman Sachs, Citi, Stifel, Barclays and Tigress Financial, have lifted their Royal Caribbean price targets, which signals confidence in how the company is running the business and managing costs.
Wells Fargo, through analyst Trey Bowers, raised its target to US$373 from US$316 and highlighted cruise supply and demand trends over the next five years as a key support for the long term growth story.
BofA and TD Cowen pointed to cruise spending data and what they describe as strong underlying demand, with TD Cowen also calling out favorable capacity trends through fiscal 2029 as part of its updated target.
Even where ratings stay Neutral, higher targets from firms like BofA and Citi still reflect recognition of Royal Caribbean’s execution on booking trends, pricing, and overall growth momentum.
Several bullish notes acknowledge near term Caribbean yield and geopolitical headwinds, but frame these as temporary issues that investors may look past when weighing the company’s longer term opportunity.
🐻 Bearish Takeaways
Some analysts have taken a more cautious stance, with Truist and Stifel trimming their targets and Mizuho making both upward and downward revisions in recent weeks, which underlines that not everyone sees one way risk.
TD Cowen flagged a “tough” earnings season for Royal Caribbean and Norwegian tied to Caribbean yield headwinds, which speaks to concern around near term revenue quality even when longer term demand is viewed positively.
Citi’s January report increased the target but also opened a “downside 30 day short term view,” suggesting that, in the near term, the firm sees risk that the stock could give back some gains.
Across the more cautious commentary, common themes include questions about how much upside is already priced in, sensitivity to regional capacity shifts, and the possibility that short term earnings could be pressured even if the overall cruise backdrop remains constructive.
Royal Caribbean Group signed agreements with Chantiers de l’Atlantique in France for two firm Discovery Class ship orders, with options for four more, targeting debut deliveries in 2029 and 2032. This extends a long running partnership on multiple vessel classes.
The company issued earnings guidance for 2026 that includes an expectation of double digit revenue. This provides an additional data point on how management is thinking about the next few years.
Royal Caribbean Cruises Ltd. announced a share repurchase program authorizing up to US$2b of common stock buybacks, following board approval of a plan on December 10, 2025.
Under its existing buyback activity, the company completed repurchases of 3,500,000 shares, representing 1.29% of shares, for a total of US$1,000m under a program announced on February 12, 2025. It separately bought back another 714,286 shares for US$200m under a program announced on December 10, 2025.
Royal Caribbean Group participated in two large port infrastructure projects. These included a groundbreaking for a new 7,000 passenger capable Cruise Terminal G at PortMiami with a planned US$345m investment, and an agreement to redevelop the Crown Bay District in St. Thomas into a mixed use tourism destination with the Virgin Islands Port Authority and Cruise Terminals International.
The fair value estimate has risen by about US$31, from US$331.04 to US$362.04 per share. This reflects updated inputs to the valuation model.
The discount rate has moved from 9.08% to 8.92%, which increases the present value of projected cash flows in the model.
The revenue growth assumption has shifted from 9.32% to 8.94%. This indicates a more conservative view on top line expansion.
The net profit margin assumption has moved from 25.92% to 26.95%, pointing to expectations for somewhat stronger profitability on each dollar of revenue.
The future P/E multiple has moved only slightly, from 20.60x to 20.51x. This suggests that the valuation change is driven more by cash flow and margin assumptions than by a different view on the earnings multiple.
Narratives on Simply Wall St let you connect the story you see for a company with your own numbers, including future revenue, earnings, margins and a fair value. Each Narrative ties Royal Caribbean Cruises’ business outlook to a forecast, then compares that fair value to the current share price to help you decide what to do. Narratives live in the Community page, update automatically when new news or earnings land, and give you an accessible way to keep your thesis and the data in one place.
Track how new ships, private destinations and guest spending assumptions feed into expected revenue, earnings and margins through 2028.
See the specific analyst assumptions on revenue growth, profit margins, earnings per share, P/E and discount rate, and compare them to your own view.
Watch how the fair value responds when new guidance, booking trends or macro risks update the Narrative in real time so you can judge price versus value quickly.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
