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Royal Caribbean (RCL) is a Top-Ranked Value Stock: Should You Buy?

Zacks Equity Research
·2-min read

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

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Royal Caribbean (RCL)

Based in Miami and incorporated in 1985, Royal Caribbean Cruises is a cruise company. It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, it has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises.

RCL boasts a Value Style Score of B and VGM Score of B, and holds a Zacks Rank #1 (Strong Buy) rating. Shares of Royal Caribbean are trading at a forward earnings multiple of 13X, as well as a PEG Ratio of 0.4, a Price/Cash Flow ratio of 10.8X, and a Price/Sales ratio of 2.5X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Seven analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.95 to $10.96 per share. RCL has an average earnings surprise of 18.3%.

RCL should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

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Zacks Investment Research