DCF Studio

    RCL · NYQ · Consumer Cyclical

    Royal Caribbean Cruises Ltd.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 31.66

    Market price

    USD 321.07

    Implied upside

    -90.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Wrong toolThis model values the shares at 9.9% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedCapital expenditure runs at 26.9% of revenue against depreciation of 11.4%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 31.66-90.1%
    Exit multiple
    USD 149.26-53.5%
    Market price
    USD 321.07

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 19.6bnUSD 21.0bnUSD 22.4bnUSD 23.8bnUSD 25.1bnUSD 26.3bnUSD 27.5bnUSD 28.5bnUSD 29.4bnUSD 30.1bn+4.9%
    EBITUSD 3.1bnUSD 3.4bnUSD 3.6bnUSD 3.8bnUSD 4.0bnUSD 4.2bnUSD 4.4bnUSD 4.6bnUSD 4.7bnUSD 4.8bn+4.9%
    NOPATUSD 3.1bnUSD 3.3bnUSD 3.5bnUSD 3.8bnUSD 4.0bnUSD 4.2bnUSD 4.3bnUSD 4.5bnUSD 4.6bnUSD 4.8bn+4.9%
    Add depreciation & amortisationUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.7bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.4bn+4.9%
    Less capital expenditureUSD -5.3bnUSD -5.4bnUSD -5.4bnUSD -5.4bnUSD -5.3bnUSD -5.2bnUSD -5.0bnUSD -4.8bnUSD -4.6bnUSD -4.2bn-2.4%
    Capex, % of revenue26.9%25.5%24.1%22.7%21.2%19.8%18.4%17.0%15.5%14.1%-
    Less increase in working capitalUSD 22.1mUSD 19.5mUSD 19.2mUSD 18.6mUSD 17.8mUSD 16.7mUSD 15.4mUSD 13.8mUSD 12.0mUSD 10.0m+8.4%
    Free cashflow to firmUSD 87.0mUSD 387.6mUSD 730.6mUSD 1.1bnUSD 1.5bnUSD 2.0bnUSD 2.4bnUSD 2.9bnUSD 3.4bnUSD 4.0bn+52.8%
    Discount factor0.95190.86270.78180.70840.64200.58180.52720.47780.43290.3923-
    Present valueUSD 82.8mUSD 334.4mUSD 571.2mUSD 787.5mUSD 980.8mUSD 1.1bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.6bn-
    Present Value Of The ForecastUSD 9.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.579Reported 1.864, pulled toward 1.0 (Blume)
    Cost of equity11.57%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.9x interest cover. Book interest / average debt was lower, at 4.6%.
    Market capitalisationUSD 85.9bn79.6% of capital
    Total debtUSD 22.0bn20.4% of capital, book value as a proxy
    Tax rate1.6%Effective, capped at statutory
    WACC10.35%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 31.66

    68% of EV

    Forecast FCFF, final year
    USD 4.0bn
    Capex at depreciation, working capital in reinvestment
    USD 4.8bn
    Less reinvestment at g/ROIC (17.1% of NOPAT)
    USD -814.1m
    Capitalised
    USD 4.0bn
    ROIC (reported)
    14.6%
    Terminal value, undiscounted
    USD 51.6bn
    Terminal value, discounted
    USD 20.2bn
    Enterprise value
    USD 29.9bn
    Less net debt
    USD 21.2bn
    Equity value
    USD 8.7bn

    Exit at 16.2x EBITDA

    Value per shareUSD 149.26

    84% of EV

    Terminal value, undiscounted
    USD 133.7bn
    Terminal value, discounted
    USD 52.5bn
    Enterprise value
    USD 62.1bn
    Less net debt
    USD 21.2bn
    Equity value
    USD 40.9bn

    Spread between methods: 130%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.35%73.3076.3580.1384.8790.85
    9.35%49.2050.5252.2154.3657.09
    10.35%30.8131.1431.6632.4133.44
    11.35%16.3716.1215.9715.9216.02
    12.35%4.774.183.633.142.70

    Outlined: this model. Green text: above today's price of 321.07. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year26.6%5.3%20.4%
    EBIT margin27.4%16.1%45.8%
    Discount rate-10.4%5.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.