Royal Caribbean’s stock has fallen despite strong fundamentals, including a recent 52-week low and underperformance over multiple time horizons. Q1 2026 results showed adjusted EPS of $3.60 versus $3.20 consensus, with revenue up 11.33% year over year to $4.452 billion. Net income rose 28.9% to $941 million, and adjusted EBITDA margin expanded 310 basis points to 38.2%. The selloff is linked to Mexico’s intent to deny the Perfect Day Mexico environmental permit and higher fuel costs, while operating performance remained resilient. Management reported a record WAVE season and guided FY2026 adjusted EPS to $17.10 to $17.50, supported by growth initiatives, share repurchases, and a credit card launch.
"Royal Caribbean repurchased 2.9 million shares for $836 million in Q1 alone, with $1 billion remaining. The Street's $340.46 consensus and our bull case scenario of $377.05 reflect that compounding setup. Mexico's intent to deny the Perfect Day Mexico permit dings a key destination growth pillar, though Royal Caribbean is re-engaging with stakeholder"
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