Royal Caribbean Group

Methodology

Royal Caribbean's cruise operations remain in post-pandemic recovery with elevated debt and normalization challenges affecting sustainable profitability assessment. Yield management, new ship deployments, and occupancy create earnings visibility. The leveraged model requires careful evaluation of normalized earnings power beyond near-term recovery dynamics.

Methodology

PEG analysis is challenging for Royal Caribbean given recovery-driven growth that won't be sustainable long-term and debt from pandemic financing. During recovery, growth rates appear very high off depressed bases. Focus on EV/EBITDA multiples, debt-adjusted metrics, and normalized yield rather than earnings growth for this capital-intensive, leveraged cruise operator.

Methodology

Royal Caribbean suspended dividends during the pandemic and hasn't reinstated them given debt reduction priorities and capital needs for new ship orders. Without dividends, PEGY equals PEG and both face recovery distortions. For cruise operators, deleveraging progress and yield optimization matter more than traditional valuation metrics currently.