Why Royal Caribbean Stock Cruised to a Nearly 15% Gain This Week

Anyone wanting to hop on a cruise to wealth would have done well investing in Royal Caribbean Group (NYSE: RCL) stock these past few days. Buoyed by a convincing earnings beat in its most recently reported quarter and a clutch of analyst price target increases, the shares notched new all-time highs during the week. According to data compiled by S&P Global Market Intelligence, they rose by almost 15% in value in the Monday to Friday stretch.

Smooth sailing

Investors rushed to board Royal Caribbean stock on Tuesday after it unveiled its fourth-quarter and full-year 2024 figures and -- by the way -- announced a push into a potentially major new business.

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The quarter saw the company book $3.76 billion in revenue, for a robust 13% improvement over the same period of 2023. More impressively, the company managed to nearly double its headline net income; this came in at $553 million. On a non-GAAP (adjusted) per-share basis, Royal Caribbean's bottom-line profit was 30% higher at $1.63. The revenue figure was essentially in line with analyst projections, but net income beat them convincingly.

The company could very well be sailing into an era of even higher growth in the likely case its new business is successful. It announced the launch of Celebrity River Cruises, its entry into a niche but popular segment of the cruise industry. The unit's initial fleet will consist of 10 ships, and sailings are planned to begin in 2027.

The pundits approved

This blast of good news really brought out the bulls for Royal Caribbean, with several analysts upping their price targets following the earnings release. Among these was Barclays, whose pundit Brandt Montour raised the bank's price target on the stock to $308 per share from $287. Montour also maintained his overweight -- buy, in other words -- recommendation on the company.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.