WEBULL
WebtradeDownload

The No. 1 Reason to Buy Royal Caribbean Stock in November

The Motley Fool · 6d ago

Key Points

  • Last week's "beat-and-raise" performance refreshes the reason why it's the class act of ocean cruise line stocks.

  • With strong bookings for future sailings at higher price points, the near-term outlook is bright for Royal Caribbean.

  • You can buy the shares for just 15 times next year's profit target.

Royal Caribbean (NYSE: RCL) is coasting into November with bullish momentum. It enters the month having posted blowout financial results last week. A month earlier, it expanded its reach to landlubbers, acquiring a 50% stake in the Sandals and Beaches all-inclusive resorts across the Caribbean.

However, the biggest reason to buy Royal Caribbean in November -- after back-to-back months of positive developments -- is simple: Royal Caribbean is probably cheaper than you think.

Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »

Someone looking out to the ocean from a stateroom veranda.

Image source: Getty Images.

Making waves

It's been a challenging year for cruise line operators since the crisis in the Strait of Hormuz spiked oil prices and made sea travel more prohibitive. Despite the setback, more than 40 million people are expected to go cruising worldwide next year.

Royal Caribbean is the only one of the three major publicly traded ocean cruise lines to be trading higher in 2026. The stock's 10% rise this year is a testament to its superior growth and profitability. Last week's beat-and-raise performance is the latest example of its industry leadership.

Deep value in the deep seas

Royal Caribbean now expects to earn an adjusted $17.85 to $17.95 per share this year, raising the midpoint of its range by $0.10 a share. Royal Caribbean enters November trading at a reasonable 17 times that raised earnings outlook. You can buy the stock for just 15 times next year's analyst profit target.

This is an attractive multiple for a market leader in an expanding industry. Its nearly 2% dividend yield offers a bonus on top of the potential capital gains. With strong near-term bookings for future sailings and a long streak of bottom-line beats, it should be another good month in a good year for a great growth stock.

Rick Munarriz has positions in Royal Caribbean Cruises. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.