ROYAL CARIB. CRUISE NYSE-RCL
TIMELINESS
SAFETY
TECHNICAL
3
3
4
High:
Low:
Raised 7/29/16
55.2
38.6
46.8
32.5
RECENT
PRICE
46.4
33.9
42.6
6.0
14.4 RELATIVE
DIV’D
Median: 16.0) P/E RATIO 0.64 YLD 2.1%
73.04 P/ERATIO 12.2(Trailing:
27.4
5.4
47.8
22.0
50.0
18.7
36.2
22.1
47.7
31.3
83.9
45.9
103.4
65.9
99.8
64.2
Target Price Range
2019 2020 2021
LEGENDS
7.0 x ″Cash Flow″ p sh
. . . . Relative Price Strength
Options: Yes
Shaded area indicates recession
Raised 8/9/13
Lowered 7/29/16
BETA 1.35 (1.00 = Market)
VALUE
LINE
200
160
2019-21 PROJECTIONS
100
80
60
50
40
30
Ann’l Total
Price
Gain
Return
High 165 (+125%) 24%
Low 110 (+50%) 13%
Insider Decisions
to Buy
Options
to Sell
S
0
2
0
O
0
1
3
N
0
0
2
D
0
0
0
J F
0 0
0 21
0 0
M
0
0
0
A
0
0
0
M
0
0
0
20
% TOT. RETURN 6/16
Institutional Decisions
3Q2015
4Q2015
1Q2016
243
215
270
to Buy
to Sell
203
230
236
Hld’s(000) 155370 150201 157964
Percent
shares
traded
60
40
20
1 yr.
3 yr.
5 yr.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
14.95 16.40 17.80 19.30 22.64 23.31 24.73 28.94 30.69 27.53 31.28 33.15 33.56 35.98
3.51
2.93
3.41
3.28
4.32
5.07
4.99
5.11
5.14
3.37
4.96
5.76
5.08
5.55
2.31
1.35
1.63
1.42
2.26
3.03
2.94
2.82
2.68
.71
1.95
2.77
1.97
2.14
.48
.52
.52
.52
.52
.56
.60
.60
.45
--.20
.54
.74
6.71
9.06
3.58
5.25
3.13
2.04
5.58
6.20 10.45 11.58 10.13
5.16
5.64
3.45
18.86 19.58 20.91 21.74 23.87 26.40 28.80 31.80 31.97 35.05 36.79 36.98 36.27 39.82
191.69 191.84 192.98 196.11 201.25 210.36 211.50 212.48 212.82 213.95 215.90 227.37 229.08 221.22
11.5
15.0
11.9
16.7
19.3
15.0
13.6
14.6
9.7
22.4
16.2
12.5
14.6
17.5
.75
.77
.65
.95
1.02
.80
.73
.78
.58
1.49
1.03
.78
.93
.98
1.8%
2.6%
2.7%
2.2%
1.2%
1.2%
1.5%
1.5%
1.7%
--.6%
1.9%
2.0%
THIS
STOCK
VL ARITH.*
INDEX
-13.1
113.0
94.4
-1.9
26.6
54.4
© VALUE LINE PUB. LLC
19-21
36.76 38.07 42.35 44.20
7.00
8.73
9.90 11.00
3.43
4.82
6.00
7.00
1.10
1.35
1.50
1.60
8.25
7.40
6.25
6.25
37.72 36.99 40.95 43.70
219.62 217.99 215.00 215.00
17.3
17.5 Bold figures are
Value Line
.91
.88
estimates
1.8%
1.6%
Sales per sh
‘‘Cash Flow’’ per sh
Earnings per sh A
Div’ds Decl’d per sh B
Cap’l Spending per sh
Book Value per sh C
Common Shs Outst’g D
Avg Ann’l P/E Ratio
Relative P/E Ratio
Avg Ann’l Div’d Yield
55.80
15.65
8.70
2.00
6.30
48.85
215.00
16.0
1.00
1.4%
5229.6 6149.1 6532.5 5889.8 6752.5 7537.3 7688.0 7959.9
24.5% 22.5% 20.7% 17.9% 21.4% 21.7% 19.8% 20.2%
421.6 483.1 520.4 568.2 643.7 702.4 730.5 754.7
633.9 603.4 573.7 152.5 426.7 607.4 432.2 473.7
--------12.1%
9.8%
8.8%
2.6%
6.3%
8.1%
5.6%
6.0%
d1371 d1346 d1697 d1723 d2429 d2098 d3178 d3311
5040.3 5346.5 6539.5 7663.6 7951.2 7857.0 6970.5 6511.4
6091.6 6757.3 6803.0 7499.7 7942.5 8407.8 8308.7 8808.3
6.9%
6.3%
5.4%
2.1%
3.5%
4.8%
3.9%
4.2%
10.4%
8.9%
8.4%
2.0%
5.4%
7.2%
5.2%
5.4%
8.4%
7.5%
6.6%
2.0%
5.4%
7.0%
3.8%
3.7%
20%
16%
22%
--4%
27%
30%
8073.9
21.3%
772.4
764.1
-9.5%
d3048
7644.3
8284.4
5.6%
9.2%
6.8%
26%
Sales ($mill)
Operating Margin
Depreciation ($mill)
Net Profit ($mill)
Income Tax Rate
Net Profit Margin
Working Cap’l ($mill)
Long-Term Debt ($mill)
Shr. Equity ($mill) C
Return on Total Cap’l
Return on Shr. Equity
Retained to Com Eq
All Div’ds to Net Prof
12000
23.5%
1500
1870
Nil
15.6%
d1500
5000
10500
12.0%
18.0%
13.5%
23%
BUSINESS: Royal Caribbean Cruises Ltd. is the world’s secondlargest cruise company with 40 cruise ships in service and two under construction. It owns five brands: Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, Pullmantur, CDF
Croisieres de France. In addition, it has a 50% investment in a joint
venture with TUI AG, which operates TUI Cruises. Employees: Ap-
proximately 66,100. Significant stockholders include: A. Wilhelmsen
AS, 15.5%; Osiris Holdings, 5.2%; officers and directors (including
Arne Wilhelmsen), 15.5% (4/16 proxy). Chairman & CEO: Richard
D. Fain. Incorporated: Republic of Liberia. Address: 1050 Caribbean Way, Miami, Florida 33132. Telephone: 305-539-6000. Internet: www.rclinvestor.com
Shares of Royal Caribbean have lost
some ground since our May report. InANNUAL RATES Past
Past Est’d ’13-’15 vestors turned sour on concerns over the
of change (per sh)
10 Yrs.
5 Yrs.
to ’19-’21
effects of the surprise decision of voters in
Sales
5.5%
4.5%
6.5%
the U.K. to leave the European Union.
‘‘Cash Flow’’
5.5%
9.5% 11.0%
Earnings
4.5% 14.0% 19.0%
While the vote didn’t lead to an immediate
Dividends
7.0%
- - 20.5%
change of law, it created significant conBook Value
4.5%
2.0%
4.0%
cerns about the regulatory environment
QUARTERLY SALES ($ mill.) E
CalFull and economic growth over the medium and
endar Mar.31 Jun.30 Sep.30 Dec.31 Year long terms. Indeed, both the pound and
2013 1911 1883 2312 1854
7959.9 the euro weakened relative to the U.S. dol2014 1887 1980 2389 1818
8073.9 lar in the aftermath of the vote. This is a
2015 1816 2058 2523 1902
8299.1 significant concern for Royal Caribbean, as
2016 1918 2100 3000 2082
9100
it receives a substantial proportion of its
2017 2100 2200 3050 2150
9500
sales from Europe, and currency headEARNINGS PER SHARE A
CalFull winds have tended to hinder growth in
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
recent years in the dollar value of the com2013
.35
.11
1.65
.03
2.14 pany’s sales.
2014
.12
.62
2.19
.50
3.43 We expect strong profit growth out to
2015
.20
.84
2.84
.94
4.82
2016
.46
1.20
3.20
1.14
6.00 the end of the decade, largely due to
2017
.65
1.45
3.45
1.45
7.00 new ships. The quantum-class ship Ovation of the Seas and the oasis-class ship
B
QUARTERLY
DIVIDENDS
PAID
CalFull Harmony of the Seas both entered service
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
during the second quarter. Harmony of the
2012
.20
.10
-.24
.54 Seas is the largest ship ever entered into
2013
.12
.12
-.25
.49 Royal Caribbean’s fleet. It includes 5,450
2014
.25
.25
.30
-1.10
2015
.60
.30
.375
.375 1.35 berths (occupancy units), some of which
are large suites and some amenities that
2016
.375
.375
exceed those of older ships, such as a bar
manned by robotic bartenders that mix
drinks. Most importantly for RCL shareholders, the new ship classes tend to improve profit margins, as they yield higher
revenue per berth while being more cost
efficient. The company has many more
ships on order, most of which are expected
to enter service between 2018 and 2020.
Thus, capital expenditures are expected to
be relatively modest next year, but then
ramp up in 2018. Furthermore, TUI
Cruises, a joint venture 50% owned by
Royal Caribbean, will be initiating four
new ships over the next four years.
These shares are best suited to longterm-oriented accounts. The stock has
an Average rank (3) for Timeliness, and
thus is likely to perform in line with the
broader equity market over the next six to
12 months. However, appreciation potential out to the 2019-2021 stretch is considerably above average, as we project share
net to rise at a double-digit pace over the
next 3 to 5 years, and the valuation is currently modest on a price/earnings ratio
basis.
Adam J. Platt
August 5, 2016
CAPITAL STRUCTURE as of 3/31/16
Total Debt $8702.2 mill. Due in 5 Yrs $6184 mill.
LT Debt $7806.7 mill. LT Interest $270 mill.
(LT int. earned: 5.0x; Total interest coverage: 4.9x.)
(49% of Cap’l)
Leases, Uncapitalized Annual rentals $22.2 mill.
No Defined Benefit Pension Plan
Preferred Stock None
Common Stock 215,241,400 shares
as of 4/22/16
MARKET CAP: $15.7 billion (Large Cap)
CURRENT POSITION 2014
2015 3/31/16
($MILL.)
Cash Assets
189.2
121.6
117.4
Receivables
261.3
238.9
253.3
Inventory (FIFO)
123.5
121.3
121.4
Other
227.0
355.2
400.2
Current Assets
801.0
837.0
892.3
Accts Payable
331.5
302.1
371.9
Debt Due
799.6
899.7
895.5
Other
2718.1 3091.0 3130.5
Current Liab.
3849.2 4292.8 4397.9
(A) Diluted earnings. 2009 and 2010 figures revised to reflect accounting change in Q2 ’11.
Quarterly figures may not sum due to rounding
and/or a change in share count. Excludes non-
8299.1
25.5%
827.0
1077.1
-13.0%
d3456
7767.4
8063.0
7.7%
13.4%
9.9%
26%
9100
22.5%
840
1290
Nil
12.0%
d3000
7000
8800
8.0%
14.5%
11.0%
25%
recurring: ’00, d9¢; ’01, d3¢; ’02, 16¢; ’05, 22¢; tangibles. In ’15: $286.8 million, $1.32 per
’10, 39¢. Next earnings report due late Oct. (B) share. (D) In millions. (E) Sales numbers not
Dividend discontinued November 2008; exact due to rounding.
reinstated August 2011. (C) Includes in-
© 2016 Value Line, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.
9500
22.5%
860
1505
Nil
12.1%
d2000
6000
9400
10.0%
16.0%
12.5%
23%
Company’s Financial Strength
Stock’s Price Stability
Price Growth Persistence
Earnings Predictability
B+
35
55
50
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