3 Things to Watch With Royal Caribbean Stock
Royal Caribbean is an industry leader with very strong post‑COVID demand and impressive operational execution.
But high capital intensity, elevated leverage, valuation run-up, and cyclical sensitivity mean investors should be cautious.
– Panel verdict: Motley Fool Scoreboard average 6.6 — very strong business score but mixed safety/valuation marks.
– Operational strength: load factors near 110%, high bookings, and solid revenue growth underpin the thesis.
– Management & strategy: CEO Jason Liberty’s ecosystem push (shore experiences, clubs) can boost ancillary revenue.
– Financials: cash flow and deleveraging have improved and the company holds an investment‑grade rating, yet debt and ongoing capex remain material.
– Valuation & risks: roughly 25% higher share count since 2019, significant price appreciation, retail-driven volatility, and recession exposure.
– Watchlist for investors: booking pace and pricing, yield per passenger and onboard/shore revenue, net leverage and free cash flow after capex, customer deposits, and share-count changes.
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