Royal Caribbean (RCL) Moves 3.8% Higher: Will This Strength Last?
Royal Caribbean (RCL) shares rallied 3.8% in the last trading session to close at $238.98. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 20.6% loss over the past four weeks.
Royal Caribbean’s recent share price increase likely reflects growing investor interest in its planned partnership with Sandals and Beaches Resorts. The $3 billion investment for a 50% stake could extend its vacation platform into all-inclusive resorts alongside its cruise and private destination offerings. The companies also plan to explore broader distribution and deeper guest engagement, while Royal Caribbean expects the transaction to add to earnings in 2027.
This cruise operator is expected to post quarterly earnings of $6.35 per share in its upcoming report, which represents a year-over-year change of +10.4%. Revenues are expected to be $5.58 billion, up 8.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Royal Caribbean, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on RCL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Royal Caribbean is part of the Zacks Leisure and Recreation Services industry. Madison Square Garden (MSGS), another stock in the same industry, closed the last trading session 2% higher at $402.5. MSGS has returned -0.9% in the past month.
For Madison Square Garden, the consensus EPS estimate for the upcoming report has changed -0.3% over the past month to -$1.18. This represents a change of -218.9% from what the company reported a year ago. Madison Square Garden currently has a Zacks Rank of #4 (Sell).
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This article originally published on Zacks Investment Research (zacks.com).
