What Happened?

Shares of cruise vacation company Royal Caribbean $(RCL)$ jumped 4.6% in the afternoon session after it received bullish commentary from Wall Street, with both Stifel and William Blair reiterating their positive ratings on the cruise operator. 

Stifel reiterated its "Buy" rating on the stock with a $420 price target, noting the company's fiscal 2027 targets appear "increasingly conservative." The firm highlighted projections for 31% year-over-year EPS growth for fiscal 2025 following meetings with Royal Caribbean's management. Adding to the positive sentiment, William Blair also reiterated its "Outperform" rating. The investment firm cited several factors for its confidence, including favorable demographic trends and Royal Caribbean's competitive advantages stemming from its investments in innovative ships and private destinations. William Blair believes these strategies create a "bigger and deeper competitive moat" for the company within the cruise industry, supporting a healthy growth outlook.

The shares closed the day at $327.03, up 4.2% from previous close.

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What Is The Market Telling Us

Royal Caribbean’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 20 days ago when the stock dropped 5% on the news that the company's second-quarter revenue slightly missed Wall Street expectations and its third-quarter profit forecast was underwhelming. The negative reaction occurred despite the cruise operator reporting stronger-than-expected second-quarter profits, with adjusted earnings of $4.38 per share, and raising its full-year guidance. However, the company's revenue of $4.54 billion came in just shy of the $4.55 billion consensus estimate. Digging deeper, concerns may have also stemmed from a projected increase in net cruise costs for the third quarter and a slowdown in net yield growth, a key measure of profitability.

Royal Caribbean is up 43.1% since the beginning of the year, and at $327.69 per share, it is trading close to its 52-week high of $352.84 from July 2025. Investors who bought $1,000 worth of Royal Caribbean’s shares 5 years ago would now be looking at an investment worth $5,425.

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