10 Best Leisure and Recreation Services Stocks to Buy Now

8. Royal Caribbean Cruises Ltd. (NYSE:RCL)

Number of Hedge Fund Holders: 52

Revenue Growth Rate (year-over-year): 57.24%

One of the Best Leisure Stocks, Royal Caribbean Cruises Ltd. (NYSE:RCL), the world’s second-largest cruise operator, runs 68 ships under five international brands and partner firms. The business is in charge of Royal Caribbean International, Silversea, and Celebrity Cruises. The company also holds a 50% share in a joint venture that manages TUI Cruises and Hapag-Lloyd Cruises. Royal’s collection of brands allows it to compete on the basis of innovation, ship and service quality, variety of itineraries, destination selection, and cost. The company completed the sale of its Azamara brand in 2021.

Royal Caribbean Cruises Ltd. (NYSE:RCL)’s high demand and pricing patterns have been sustained into 2024 by consumer enthusiasm for travel. After the fleet was redeployed, which was completed in the middle of 2022, occupancy returned to historical levels, helping to normalize cash flow and earnings. The firm anticipates significant growth in 2024 as a result of excellent booking patterns and price levels brought about by a robust customer appetite for travel, despite record pricing in 2023 (13% higher than in 2019).

In Q3 of 2024, Royal Caribbean Cruises Ltd. (NYSE:RCL)’s revenue grew by 17.45% YoY to $4.9 billion, primarily due to strong close-in demand, higher onboard spending, and improved pricing for European and Alaskan itineraries. Onboard and pre-cruise revenue greatly exceeded 2023 levels, showing strong consumer spending and participation, while net yields increased by 7.9% year over year. The company’s 2024 EPS forecast has been raised to $11.57–$11.62 (up 71% YoY), and it projects that 2025 EPS would surpass $14 due to yield growth, pricing power, and new private destinations like Perfect Day Mexico (2027).

Argus maintained its Buy rating on Royal Caribbean Cruises Ltd. (NYSE:RCL) shares and increased its price objective from $250 to $280. In a research note, the analyst informs investors that the company has resumed paying dividends, with a $0.40 quarterly dividend per share being paid on October 11, 2024. Additionally, according to Argus, the high cruise occupancy rate of 111% in Q3 of 2024 indicates sustained high demand and is probably going to provide higher-than-expected revenue and earnings.

E. Shaw’s D E Shaw was the largest stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 2.28 million shares worth $404.07 million as of Q3.