Royal Caribbean Cruises Ltd. (RCL) Hits Fresh High: Is There Still Room to Run?

Have you been paying attention to shares of Royal Caribbean (RCL)? Shares have been on the move with the stock up 17% over the past month. The stock hit a new 52-week high of $239.39 in the previous session. Royal Caribbean has gained 83.5% since the start of the year compared to the 13.8% move for the Zacks Consumer Discretionary sector and the 20.5% return for the Zacks Leisure and Recreation Services industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 29, 2024, Royal Caribbean reported EPS of $5.2 versus consensus estimate of $5.05.For the current fiscal year, Royal Caribbean is expected to post earnings of $11.62 per share on $16.49 billion in revenues. This represents a 71.64% change in EPS on a 18.63% change in revenues. For the next fiscal year, the company is expected to earn $14.18 per share on $18 billion in revenues. This represents a year-over-year change of 22.04% and 9.18%, respectively.Valuation MetricsRoyal Caribbean may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.Royal Caribbean has a Value Score of B. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 20.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.7X. On a trailing cash flow basis, the stock currently trades at 18X versus its peer group's average of 10.7X. Additionally, the stock has a PEG ratio of 0.63. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Royal Caribbean currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Royal Caribbean meets the list of requirements. Thus, it seems as though Royal Caribbean shares could still be poised for more gains ahead.How Does RCL Stack Up to the Competition?Shares of RCL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Marriott Vacations Worldwide Corporation (VAC). VAC has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of D.Earnings were strong last quarter. Marriott Vacations Worldwide Corporation beat our consensus estimate by 17.65%, and for the current fiscal year, VAC is expected to post earnings of $7.41 per share on revenue of $4.85 billion.Shares of Marriott Vacations Worldwide Corporation have gained 19.9% over the past month, and currently trade at a forward P/E of 14.88X and a P/CF of 6.8X.The Leisure and Recreation Services industry is in the top 9% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RCL and VAC, even beyond their own solid fundamental situation.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report Marriott Vacations Worldwide Corporation (VAC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks