Shares of Royal Caribbean Group (NYSE: RCL) hit an all-time high today after the cruise ship operator reported solid earnings and strong guidance, as well as made a major new announcement. The stock, which has more than doubled over the past year, was trading higher by 13.4% at 1:45 p.m. ET.
Taking on the river cruise trend
Royal Caribbean CEO Jason Liberty said the company has been seeing a significant increase in demand for its various brands, and now the company is adding a new one to offer river cruises. It is improving profitability as well. Adjusted fourth-quarter net earnings of $1.63 per share topped Wall Street expectations, even as revenue was in line with estimates.
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The company said it sees adjusted earnings per share (EPS) moving even higher this year as "strong demand for the company's vacation experiences continues to accelerate into 2025." But perhaps even bigger news for investors was the announced launch of Celebrity River Cruises.
The new premium river cruise vacation brand will start accepting bookings this year and plans to sail in 2027 after an initial order of 10 new ships. River cruise brand Viking Holdings has brought more investor attention to the river cruise experience after it began trading with an initial public offering (IPO) in May 2024. That stock has soared more than 80% higher since the IPO.
Is Royal Caribbean a buy?
Overall, the strong demand and pricing environment has Royal Caribbean predicting a more than 20% boost in 2025 earnings compared to 2024. The addition of a luxury river cruise brand is expected to resonate with its existing customer base.
The company said about half of existing guests have either already experienced or intend to participate on river cruises. That bodes well for the company beyond 2025, and helps explain why investors pushed shares to a new high today.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends Viking. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
