Royal Caribbean (RCL) Gains But Lags Market: What You Should Know

In the latest trading session, Royal Caribbean (RCL) closed at $22.41, marking a +0.36% move from the previous day. This change lagged the S&P 500's 0.47% gain on the day. Meanwhile, the Dow gained 0.95%, and the Nasdaq, a tech-heavy index, added 2.3%.

Heading into today, shares of the cruise operator had lost 79.89% over the past month, lagging the Consumer Discretionary sector's loss of 36.4% and the S&P 500's loss of 28.7% in that time.

Investors will be hoping for strength from RCL as it approaches its next earnings release. The company is expected to report EPS of -$0.06, down 104.58% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.37 billion, down 2.99% from the year-ago period.

RCL's full-year Zacks Consensus Estimates are calling for earnings of $4.04 per share and revenue of $10.78 billion. These results would represent year-over-year changes of -57.65% and -1.58%, respectively.

Investors should also note any recent changes to analyst estimates for RCL. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 49.53% lower. RCL is holding a Zacks Rank of #5 (Strong Sell) right now.

Investors should also note RCL's current valuation metrics, including its Forward P/E ratio of 5.53. For comparison, its industry has an average Forward P/E of 5.08, which means RCL is trading at a premium to the group.

We can also see that RCL currently has a PEG ratio of 0.61. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Leisure and Recreation Services was holding an average PEG ratio of 0.57 at yesterday's closing price.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 154, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.