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 16.5% over the past month. The stock hit a new 52-week high of $277.08 in the previous session. Royal Caribbean has gained 15.6% since the start of the year compared to the 3.5% move for the Zacks Consumer Discretionary sector and the 5.6% return for the Zacks Leisure and Recreation Services industry.What's Driving the Outperformance?The stock has a great 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 January 28, 2025, Royal Caribbean reported EPS of $1.63 versus consensus estimate of $1.5 while it missed the consensus revenue estimate by 0.28%.For the current fiscal year, Royal Caribbean is expected to post earnings of $14.74 per share on $17.96 billion in revenues. This represents a 24.92% change in EPS on an 8.94% change in revenues. For the next fiscal year, the company is expected to earn $17.27 per share on $19.76 billion in revenues. This represents a year-over-year change of 17.18% and 10.02%, 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. Investors should consider the style scores a valuable tool that can help you to 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 A, respectively, giving the company a VGM Score of A.In terms of its value breakdown, the stock currently trades at 18.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.8X. On a trailing cash flow basis, the stock currently trades at 14.5X versus its peer group's average of 11.9X. Additionally, the stock has a PEG ratio of 1. 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 rising earnings estimates.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 have a bit more room to run in the near term.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 Life Time Group Holdings, Inc. (LTH). LTH has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.Earnings were strong last quarter. Life Time Group Holdings, Inc. beat our consensus estimate by 23.81%, and for the current fiscal year, LTH is expected to post earnings of $1.24 per share on revenue of $2.62 billion.Shares of Life Time Group Holdings, Inc. have gained 27.2% over the past month, and currently trade at a forward P/E of 23.38X and a P/CF of 14.91X.The Leisure and Recreation Services industry is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RCL and LTH, even beyond their own solid fundamental situation.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>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 Life Time Group Holdings, Inc. (LTH): 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