NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.1%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, ROYAL CARIBBEAN CRUISES LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- ROYAL CARIBBEAN CRUISES LTD's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ROYAL CARIBBEAN CRUISES LTD increased its bottom line by earning $2.78 versus $2.42 in the prior year. For the next year, the market is expecting a contraction of 23.5% in earnings ($2.13 versus $2.78).
- Looking at the price performance of RCL's shares over the past 12 months, there is not much good news to report: the stock is down 36.43%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
Royal Caribbean Cruises Ltd. operates in the cruise vacation industry worldwide. It owns five cruise brands: Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisieres de France. The company has a P/E ratio of 10.3, above the average leisure industry P/E ratio of 10 and below the S&P 500 P/E ratio of 17.7. Royal Caribbean Cruises has a market cap of $6.23 billion and is part of the
industry. Shares are up 13.3% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff