Intrinsic value of Royal Caribbean Cruises - RCL

Previous Close

$121.23

  Intrinsic Value

$11.61

stock screener

  Rating & Target

str. sell

-90%

  Value-price divergence*

+437%

Previous close

$121.23

 
Intrinsic value

$11.61

 
Up/down potential

-90%

 
Rating

str. sell

 
Value-price divergence*

+437%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of RCL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 25.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.37
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
Revenue, $m
  8,496
  8,895
  9,316
  9,759
  10,226
  10,717
  11,234
  11,778
  12,350
  12,951
  13,584
  14,249
  14,948
  15,682
  16,455
  17,266
  18,119
  19,014
  19,956
  20,944
  21,983
  23,074
  24,221
  25,424
  26,689
  28,017
  29,412
  30,877
  32,415
  34,031
  35,727
Variable operating expenses, $m
 
  7,960
  8,335
  8,730
  9,146
  9,584
  10,045
  10,530
  11,040
  11,576
  12,140
  12,704
  13,327
  13,983
  14,671
  15,395
  16,155
  16,954
  17,793
  18,674
  19,600
  20,573
  21,595
  22,669
  23,796
  24,980
  26,224
  27,530
  28,902
  30,342
  31,855
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  7,019
  7,960
  8,335
  8,730
  9,146
  9,584
  10,045
  10,530
  11,040
  11,576
  12,140
  12,704
  13,327
  13,983
  14,671
  15,395
  16,155
  16,954
  17,793
  18,674
  19,600
  20,573
  21,595
  22,669
  23,796
  24,980
  26,224
  27,530
  28,902
  30,342
  31,855
Operating income, $m
  1,477
  935
  981
  1,029
  1,080
  1,133
  1,189
  1,248
  1,310
  1,375
  1,444
  1,544
  1,620
  1,700
  1,784
  1,871
  1,964
  2,061
  2,163
  2,270
  2,383
  2,501
  2,625
  2,756
  2,893
  3,037
  3,188
  3,347
  3,513
  3,689
  3,872
EBITDA, $m
  2,372
  1,874
  1,963
  2,056
  2,155
  2,258
  2,367
  2,482
  2,602
  2,729
  2,862
  3,002
  3,150
  3,305
  3,467
  3,638
  3,818
  4,007
  4,205
  4,413
  4,632
  4,862
  5,104
  5,357
  5,624
  5,904
  6,198
  6,506
  6,830
  7,171
  7,528
Interest expense (income), $m
  257
  313
  335
  357
  381
  406
  433
  461
  490
  521
  553
  587
  623
  661
  700
  742
  785
  831
  880
  930
  983
  1,039
  1,098
  1,160
  1,225
  1,293
  1,364
  1,439
  1,518
  1,601
  1,688
Earnings before tax, $m
  1,283
  622
  646
  672
  698
  726
  756
  787
  820
  854
  890
  957
  997
  1,039
  1,083
  1,130
  1,178
  1,230
  1,283
  1,340
  1,399
  1,462
  1,527
  1,596
  1,668
  1,744
  1,824
  1,908
  1,995
  2,088
  2,185
Tax expense, $m
  0
  168
  174
  181
  189
  196
  204
  213
  221
  231
  240
  258
  269
  281
  293
  305
  318
  332
  347
  362
  378
  395
  412
  431
  450
  471
  492
  515
  539
  564
  590
Net income, $m
  1,283
  454
  472
  490
  510
  530
  552
  575
  598
  624
  650
  699
  728
  759
  791
  825
  860
  898
  937
  978
  1,022
  1,067
  1,115
  1,165
  1,218
  1,273
  1,331
  1,393
  1,457
  1,524
  1,595

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  133
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  22,310
  23,225
  24,324
  25,481
  26,699
  27,982
  29,331
  30,751
  32,244
  33,815
  35,467
  37,203
  39,028
  40,946
  42,962
  45,081
  47,307
  49,646
  52,104
  54,685
  57,397
  60,246
  63,239
  66,382
  69,684
  73,151
  76,793
  80,618
  84,635
  88,853
  93,283
Adjusted assets (=assets-cash), $m
  22,177
  23,225
  24,324
  25,481
  26,699
  27,982
  29,331
  30,751
  32,244
  33,815
  35,467
  37,203
  39,028
  40,946
  42,962
  45,081
  47,307
  49,646
  52,104
  54,685
  57,397
  60,246
  63,239
  66,382
  69,684
  73,151
  76,793
  80,618
  84,635
  88,853
  93,283
Revenue / Adjusted assets
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
Average production assets, $m
  10,081
  10,559
  11,058
  11,584
  12,138
  12,721
  13,335
  13,980
  14,659
  15,373
  16,124
  16,913
  17,743
  18,615
  19,532
  20,495
  21,507
  22,570
  23,687
  24,861
  26,094
  27,389
  28,750
  30,179
  31,680
  33,256
  34,912
  36,651
  38,477
  40,394
  42,408
Working capital, $m
  -3,694
  -890
  -932
  -976
  -1,023
  -1,072
  -1,123
  -1,178
  -1,235
  -1,295
  -1,358
  -1,425
  -1,495
  -1,568
  -1,645
  -1,727
  -1,812
  -1,901
  -1,996
  -2,094
  -2,198
  -2,307
  -2,422
  -2,542
  -2,669
  -2,802
  -2,941
  -3,088
  -3,242
  -3,403
  -3,573
Total debt, $m
  9,076
  9,567
  10,214
  10,895
  11,613
  12,368
  13,163
  13,999
  14,879
  15,804
  16,777
  17,799
  18,874
  20,004
  21,192
  22,440
  23,751
  25,129
  26,576
  28,097
  29,694
  31,372
  33,135
  34,986
  36,931
  38,973
  41,118
  43,371
  45,737
  48,221
  50,831
Total liabilities, $m
  13,189
  13,680
  14,327
  15,008
  15,726
  16,481
  17,276
  18,112
  18,992
  19,917
  20,890
  21,912
  22,987
  24,117
  25,305
  26,553
  27,864
  29,242
  30,689
  32,210
  33,807
  35,485
  37,248
  39,099
  41,044
  43,086
  45,231
  47,484
  49,850
  52,334
  54,944
Total equity, $m
  9,121
  9,546
  9,997
  10,473
  10,973
  11,500
  12,055
  12,639
  13,252
  13,898
  14,577
  15,290
  16,040
  16,829
  17,657
  18,528
  19,443
  20,405
  21,415
  22,476
  23,590
  24,761
  25,991
  27,283
  28,640
  30,065
  31,562
  33,134
  34,785
  36,519
  38,339
Total liabilities and equity, $m
  22,310
  23,226
  24,324
  25,481
  26,699
  27,981
  29,331
  30,751
  32,244
  33,815
  35,467
  37,202
  39,027
  40,946
  42,962
  45,081
  47,307
  49,647
  52,104
  54,686
  57,397
  60,246
  63,239
  66,382
  69,684
  73,151
  76,793
  80,618
  84,635
  88,853
  93,283
Debt-to-equity ratio
  0.995
  1.000
  1.020
  1.040
  1.060
  1.080
  1.090
  1.110
  1.120
  1.140
  1.150
  1.160
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.250
  1.260
  1.270
  1.270
  1.280
  1.290
  1.300
  1.300
  1.310
  1.310
  1.320
  1.330
Adjusted equity ratio
  0.405
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,283
  454
  472
  490
  510
  530
  552
  575
  598
  624
  650
  699
  728
  759
  791
  825
  860
  898
  937
  978
  1,022
  1,067
  1,115
  1,165
  1,218
  1,273
  1,331
  1,393
  1,457
  1,524
  1,595
Depreciation, amort., depletion, $m
  895
  939
  982
  1,027
  1,075
  1,125
  1,178
  1,234
  1,293
  1,354
  1,419
  1,458
  1,530
  1,605
  1,684
  1,767
  1,854
  1,946
  2,042
  2,143
  2,249
  2,361
  2,478
  2,602
  2,731
  2,867
  3,010
  3,160
  3,317
  3,482
  3,656
Funds from operations, $m
  2,850
  1,393
  1,454
  1,518
  1,585
  1,656
  1,730
  1,809
  1,891
  1,978
  2,069
  2,157
  2,258
  2,363
  2,475
  2,592
  2,714
  2,843
  2,979
  3,121
  3,271
  3,428
  3,593
  3,767
  3,949
  4,140
  4,341
  4,552
  4,774
  5,006
  5,251
Change in working capital, $m
  333
  -40
  -42
  -44
  -47
  -49
  -52
  -54
  -57
  -60
  -63
  -66
  -70
  -73
  -77
  -81
  -85
  -90
  -94
  -99
  -104
  -109
  -115
  -120
  -126
  -133
  -139
  -146
  -154
  -162
  -170
Cash from operations, $m
  2,517
  1,433
  1,496
  1,562
  1,632
  1,705
  1,782
  1,863
  1,948
  2,038
  2,132
  2,223
  2,327
  2,437
  2,552
  2,673
  2,800
  2,933
  3,073
  3,220
  3,375
  3,537
  3,708
  3,887
  4,075
  4,273
  4,481
  4,699
  4,927
  5,168
  5,420
Maintenance CAPEX, $m
  0
  -869
  -910
  -953
  -999
  -1,046
  -1,097
  -1,150
  -1,205
  -1,264
  -1,325
  -1,390
  -1,458
  -1,530
  -1,605
  -1,684
  -1,767
  -1,854
  -1,946
  -2,042
  -2,143
  -2,249
  -2,361
  -2,478
  -2,602
  -2,731
  -2,867
  -3,010
  -3,160
  -3,317
  -3,482
New CAPEX, $m
  -2,494
  -478
  -499
  -526
  -554
  -583
  -614
  -645
  -679
  -714
  -751
  -789
  -830
  -872
  -917
  -963
  -1,012
  -1,063
  -1,117
  -1,174
  -1,233
  -1,295
  -1,360
  -1,429
  -1,501
  -1,576
  -1,656
  -1,739
  -1,826
  -1,918
  -2,014
Cash from investing activities, $m
  -2,725
  -1,347
  -1,409
  -1,479
  -1,553
  -1,629
  -1,711
  -1,795
  -1,884
  -1,978
  -2,076
  -2,179
  -2,288
  -2,402
  -2,522
  -2,647
  -2,779
  -2,917
  -3,063
  -3,216
  -3,376
  -3,544
  -3,721
  -3,907
  -4,103
  -4,307
  -4,523
  -4,749
  -4,986
  -5,235
  -5,496
Free cash flow, $m
  -208
  87
  86
  83
  79
  75
  72
  68
  64
  60
  56
  44
  40
  35
  31
  26
  21
  16
  10
  5
  -1
  -7
  -14
  -20
  -27
  -34
  -42
  -50
  -58
  -67
  -76
Issuance/(repayment) of debt, $m
  973
  624
  647
  682
  718
  755
  795
  836
  880
  925
  973
  1,023
  1,075
  1,130
  1,187
  1,248
  1,311
  1,378
  1,447
  1,521
  1,597
  1,678
  1,763
  1,851
  1,945
  2,042
  2,145
  2,253
  2,366
  2,485
  2,609
Issuance/(repurchase) of shares, $m
  -298
  0
  0
  0
  0
  0
  3
  9
  15
  22
  29
  15
  22
  30
  38
  46
  55
  64
  73
  83
  93
  104
  115
  127
  139
  152
  165
  179
  194
  210
  226
Cash from financing (excl. dividends), $m  
  590
  624
  647
  682
  718
  755
  798
  845
  895
  947
  1,002
  1,038
  1,097
  1,160
  1,225
  1,294
  1,366
  1,442
  1,520
  1,604
  1,690
  1,782
  1,878
  1,978
  2,084
  2,194
  2,310
  2,432
  2,560
  2,695
  2,835
Total cash flow (excl. dividends), $m
  357
  710
  733
  764
  797
  831
  869
  913
  959
  1,007
  1,057
  1,081
  1,137
  1,195
  1,256
  1,320
  1,387
  1,457
  1,531
  1,608
  1,689
  1,775
  1,864
  1,958
  2,056
  2,160
  2,268
  2,382
  2,502
  2,628
  2,759
Retained Cash Flow (-), $m
  -1,058
  -425
  -452
  -476
  -501
  -527
  -555
  -584
  -614
  -646
  -679
  -714
  -750
  -788
  -829
  -871
  -915
  -961
  -1,010
  -1,061
  -1,115
  -1,171
  -1,230
  -1,292
  -1,357
  -1,425
  -1,497
  -1,572
  -1,651
  -1,734
  -1,821
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  286
  282
  289
  296
  304
  315
  330
  345
  362
  379
  368
  387
  406
  427
  449
  472
  496
  521
  547
  575
  604
  634
  666
  699
  735
  772
  810
  851
  894
  939
Discount rate, %
 
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
 
  265
  242
  227
  211
  195
  181
  167
  153
  139
  124
  102
  89
  77
  66
  55
  45
  36
  29
  22
  17
  13
  9
  7
  5
  3
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  99.9
  99.9
  99.8
  99.8
  99.7
  99.6
  99.6
  99.5
  99.4
  99.3
  99.1
  99.0
  98.8
  98.7
  98.5
  98.4
  98.2
  98.0
  97.8
  97.6
  97.4
  97.2
  97.0

Royal Caribbean Cruises Ltd. operates as a cruise company. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises brand names. The Royal Caribbean International brand provides a range of itineraries ranging from 2 to 24 nights with options for onboard dining, entertainment, and other onboard activities to various destinations. The Celebrity Cruises brand offers itineraries ranging from 2 to 18 nights to various destinations; and operates onboard upscale ships that offer accommodations, fine dining, personalized services, and spa facilities. The Azamara Club Cruises brand offers cruise itineraries ranging from 3 to 21 nights that serve the up-market segment of the North American, the United Kingdom, and Australian markets. The company also operates ships under the partner brands, such as TUI Cruises, Pullmantur, and SkySea Cruises. As of December 31, 2016, the company operated 49 ships with itineraries ranging from 2 to 24 nights on approximately 535 destinations worldwide. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.

FINANCIAL RATIOS  of  Royal Caribbean Cruises (RCL)

Valuation Ratios
P/E Ratio 20.3
Price to Sales 3.1
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 10.3
Price to Free Cash Flow 1131.1
Growth Rates
Sales Growth Rate 2.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 54.6%
Cap. Spend. - 3 Yr. Gr. Rate 26.7%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 86.1%
Total Debt to Equity 99.5%
Interest Coverage 6
Management Effectiveness
Return On Assets 7.1%
Ret/ On Assets - 3 Yr. Avg. 5.6%
Return On Total Capital 7.4%
Ret/ On T. Cap. - 3 Yr. Avg. 5.3%
Return On Equity 14.9%
Return On Equity - 3 Yr. Avg. 10.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 41%
Gross Margin - 3 Yr. Avg. 37.9%
EBITDA Margin 28.7%
EBITDA Margin - 3 Yr. Avg. 24%
Operating Margin 17.4%
Oper. Margin - 3 Yr. Avg. 13.2%
Pre-Tax Margin 15.1%
Pre-Tax Margin - 3 Yr. Avg. 10.9%
Net Profit Margin 15.1%
Net Profit Margin - 3 Yr. Avg. 10.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 27%

RCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RCL stock intrinsic value calculation we used $8496 million for the last fiscal year's total revenue generated by Royal Caribbean Cruises. The default revenue input number comes from 2016 income statement of Royal Caribbean Cruises. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RCL stock valuation model: a) initial revenue growth rate of 4.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.6%, whose default value for RCL is calculated based on our internal credit rating of Royal Caribbean Cruises, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Royal Caribbean Cruises.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RCL stock the variable cost ratio is equal to 89.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for RCL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Royal Caribbean Cruises.

Corporate tax rate of 27% is the nominal tax rate for Royal Caribbean Cruises. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RCL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RCL are equal to 118.7%.

Life of production assets of 11.6 years is the average useful life of capital assets used in Royal Caribbean Cruises operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RCL is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9121 million for Royal Caribbean Cruises - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 213.544 million for Royal Caribbean Cruises is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Royal Caribbean Cruises at the current share price and the inputted number of shares is $25.9 billion.

RELATED COMPANIES Price Int.Val. Rating
CCL Carnival 68.87 44.09  sell
NCLH Norwegian Crui 57.90 17.52  str.sell
CUK Carnival ADR 69.47 29.76  str.sell
DIS Walt Disney 102.20 105.74  hold

COMPANY NEWS

▶ The dark side of cruises   [Aug-12-17 09:30AM  MarketWatch]
▶ Celebrity Cruises appoints woman captain in Galapagos   [Aug-10-17 07:40AM  American City Business Journals]
▶ How the stay-at-home economy affects earnings   [Aug-02-17 07:04PM  CNBC Videos]
▶ Why Royal Caribbean Is a Stock to Watch   [01:02PM  Bloomberg Video]
▶ Company News For August 02, 2017   [10:09AM  Zacks]
▶ Royal Caribbean tops Street 2Q forecasts   [Aug-01-17 09:33PM  Associated Press]
▶ Royal Caribbean: No Rough Seas Here!   [10:11AM  Barrons.com]
▶ Story Stocks from Briefing.com   [09:38AM  Briefing.com]
▶ Royal Caribbean Whips Carnival and Norwegian in This Area   [Jul-21-17 05:45PM  TheStreet.com]
▶ Royal Caribbean Cruises: Don't Wait for Weakness!   [Jul-20-17 02:50PM  Barrons.com]
▶ Cruise Line Earnings: Full Steam Ahead!   [Jul-18-17 01:12PM  Barrons.com]
▶ Royal Caribbean Testing New Unlimited Alcohol Policy   [Jul-13-17 12:50PM  InvestorPlace]
▶ Top Ranked Growth Stocks to Buy for June 30th   [Jun-30-17 09:43AM  Zacks]
▶ The 2 Best Dividend Stocks in Cruise Lines   [Jun-26-17 04:55PM  Motley Fool]
▶ Amazon, Facebook, Broadcom Are Driving This Top Mutual Fund   [Jun-22-17 08:24PM  Investor's Business Daily]
▶ Smooth sailing for cruise industry   [02:25PM  CNBC Videos]
▶ Why Carnival Corp (CCL) Stock Shouldnt Falter Anytime Soon   [Jun-21-17 11:24AM  InvestorPlace]
▶ Top Ranked Growth Stocks to Buy for June 16th   [Jun-16-17 11:53AM  Zacks]
▶ U.S. Stocks Fall as Apple Shares Decline   [Jun-06-17 12:29AM  The Wall Street Journal]
▶ Stocks Steady Despite U.K. Attack, Tensions in the Middle East   [Jun-05-17 04:11PM  The Wall Street Journal]
▶ Vacation stocks a buy? 4 trades   [Jun-02-17 05:00PM  CNBC Videos]
▶ Cramer: This red-hot sector may cruise higher   [May-31-17 06:50PM  CNBC Videos]
▶ Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks   [May-30-17 10:03AM  Investor's Business Daily]
▶ Four stocks that will float your portfolio's boat   [May-26-17 05:24PM  CNBC Videos]
▶ Is Royal Caribbean (RCL) a Great Growth Stock?   [May-25-17 08:52AM  Zacks]
▶ 2 Top Cruise Line Stocks to Buy in 2017   [May-20-17 03:00PM  Motley Fool]
▶ Cruises Boom as Millions of Chinese Take to the Seas   [May-14-17 05:00PM  Bloomberg]
▶ Royal Caribbean announces new sailings to Havana through 2019   [08:05AM  American City Business Journals]
▶ Is Royal Caribbean Too Expensive Now?   [May-10-17 04:36PM  Investopedia]
Stock chart of RCL Financial statements of RCL
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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