Intrinsic value of Royal Caribbean Cruises - RCL

Previous Close

$121.12

  Intrinsic Value

$15.21

stock screener

  Rating & Target

str. sell

-87%

  Value-price divergence*

-126%

Previous close

$121.12

 
Intrinsic value

$15.21

 
Up/down potential

-87%

 
Rating

str. sell

 
Value-price divergence*

-126%

*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 26.0

 

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
  4.30
  4.37
  4.43
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.89
  4.91
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
Revenue, $m
  8,496
  8,861
  9,249
  9,659
  10,092
  10,550
  11,034
  11,545
  12,084
  12,651
  13,250
  13,880
  14,543
  15,242
  15,977
  16,750
  17,563
  18,419
  19,318
  20,264
  21,258
  22,303
  23,401
  24,554
  25,767
  27,041
  28,379
  29,786
  31,263
  32,814
  34,444
Variable operating expenses, $m
 
  7,930
  8,275
  8,640
  9,027
  9,436
  9,867
  10,322
  10,803
  11,309
  11,842
  12,375
  12,967
  13,590
  14,245
  14,934
  15,660
  16,422
  17,224
  18,067
  18,954
  19,885
  20,864
  21,893
  22,974
  24,110
  25,303
  26,557
  27,874
  29,258
  30,711
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
  7,930
  8,275
  8,640
  9,027
  9,436
  9,867
  10,322
  10,803
  11,309
  11,842
  12,375
  12,967
  13,590
  14,245
  14,934
  15,660
  16,422
  17,224
  18,067
  18,954
  19,885
  20,864
  21,893
  22,974
  24,110
  25,303
  26,557
  27,874
  29,258
  30,711
Operating income, $m
  1,477
  932
  974
  1,018
  1,065
  1,115
  1,167
  1,223
  1,281
  1,342
  1,407
  1,504
  1,576
  1,652
  1,732
  1,816
  1,904
  1,996
  2,094
  2,196
  2,304
  2,417
  2,536
  2,661
  2,793
  2,931
  3,076
  3,228
  3,389
  3,557
  3,733
EBITDA, $m
  2,372
  1,867
  1,949
  2,035
  2,127
  2,223
  2,325
  2,433
  2,546
  2,666
  2,792
  2,925
  3,065
  3,212
  3,367
  3,530
  3,701
  3,881
  4,071
  4,270
  4,479
  4,700
  4,931
  5,174
  5,430
  5,698
  5,980
  6,276
  6,588
  6,915
  7,258
Interest expense (income), $m
  257
  313
  333
  354
  376
  399
  424
  450
  477
  506
  537
  569
  603
  639
  676
  716
  758
  801
  847
  896
  947
  1,000
  1,056
  1,116
  1,178
  1,243
  1,312
  1,384
  1,459
  1,539
  1,622
Earnings before tax, $m
  1,283
  619
  641
  664
  689
  716
  743
  773
  803
  836
  870
  935
  973
  1,013
  1,055
  1,100
  1,146
  1,195
  1,246
  1,301
  1,357
  1,417
  1,480
  1,546
  1,615
  1,688
  1,765
  1,845
  1,929
  2,018
  2,111
Tax expense, $m
  0
  167
  173
  179
  186
  193
  201
  209
  217
  226
  235
  253
  263
  274
  285
  297
  309
  323
  337
  351
  366
  383
  400
  417
  436
  456
  476
  498
  521
  545
  570
Net income, $m
  1,283
  452
  468
  485
  503
  522
  543
  564
  587
  610
  635
  683
  710
  740
  770
  803
  837
  872
  910
  949
  991
  1,035
  1,080
  1,128
  1,179
  1,232
  1,288
  1,347
  1,408
  1,473
  1,541

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
  23,137
  24,148
  25,218
  26,350
  27,547
  28,810
  30,144
  31,550
  33,032
  34,594
  36,240
  37,972
  39,796
  41,715
  43,734
  45,857
  48,091
  50,439
  52,908
  55,503
  58,231
  61,098
  64,111
  67,277
  70,603
  74,098
  77,769
  81,626
  85,677
  89,933
Adjusted assets (=assets-cash), $m
  22,177
  23,137
  24,148
  25,218
  26,350
  27,547
  28,810
  30,144
  31,550
  33,032
  34,594
  36,240
  37,972
  39,796
  41,715
  43,734
  45,857
  48,091
  50,439
  52,908
  55,503
  58,231
  61,098
  64,111
  67,277
  70,603
  74,098
  77,769
  81,626
  85,677
  89,933
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
  10,518
  10,978
  11,465
  11,979
  12,523
  13,098
  13,704
  14,343
  15,017
  15,727
  16,475
  17,263
  18,092
  18,964
  19,882
  20,848
  21,863
  22,931
  24,053
  25,233
  26,473
  27,777
  29,146
  30,585
  32,098
  33,686
  35,355
  37,109
  38,951
  40,885
Working capital, $m
  -3,694
  -2,712
  -2,830
  -2,956
  -3,088
  -3,228
  -3,377
  -3,533
  -3,698
  -3,871
  -4,054
  -4,247
  -4,450
  -4,664
  -4,889
  -5,125
  -5,374
  -5,636
  -5,911
  -6,201
  -6,505
  -6,825
  -7,161
  -7,514
  -7,885
  -8,275
  -8,684
  -9,114
  -9,566
  -10,041
  -10,540
Total debt, $m
  9,076
  9,514
  10,110
  10,740
  11,407
  12,112
  12,856
  13,642
  14,470
  15,343
  16,263
  17,232
  18,253
  19,327
  20,457
  21,646
  22,897
  24,212
  25,596
  27,050
  28,578
  30,185
  31,874
  33,648
  35,513
  37,472
  39,531
  41,693
  43,965
  46,351
  48,857
Total liabilities, $m
  13,189
  13,627
  14,223
  14,853
  15,520
  16,225
  16,969
  17,755
  18,583
  19,456
  20,376
  21,345
  22,366
  23,440
  24,570
  25,759
  27,010
  28,325
  29,709
  31,163
  32,691
  34,298
  35,987
  37,761
  39,626
  41,585
  43,644
  45,806
  48,078
  50,464
  52,970
Total equity, $m
  9,121
  9,509
  9,925
  10,365
  10,830
  11,322
  11,841
  12,389
  12,967
  13,576
  14,218
  14,895
  15,607
  16,356
  17,145
  17,974
  18,847
  19,765
  20,730
  21,745
  22,812
  23,933
  25,111
  26,350
  27,651
  29,018
  30,454
  31,963
  33,548
  35,213
  36,962
Total liabilities and equity, $m
  22,310
  23,136
  24,148
  25,218
  26,350
  27,547
  28,810
  30,144
  31,550
  33,032
  34,594
  36,240
  37,973
  39,796
  41,715
  43,733
  45,857
  48,090
  50,439
  52,908
  55,503
  58,231
  61,098
  64,111
  67,277
  70,603
  74,098
  77,769
  81,626
  85,677
  89,932
Debt-to-equity ratio
  0.995
  1.000
  1.020
  1.040
  1.050
  1.070
  1.090
  1.100
  1.120
  1.130
  1.140
  1.160
  1.170
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.250
  1.260
  1.270
  1.280
  1.280
  1.290
  1.300
  1.300
  1.310
  1.320
  1.320
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
  452
  468
  485
  503
  522
  543
  564
  587
  610
  635
  683
  710
  740
  770
  803
  837
  872
  910
  949
  991
  1,035
  1,080
  1,128
  1,179
  1,232
  1,288
  1,347
  1,408
  1,473
  1,541
Depreciation, amort., depletion, $m
  895
  936
  975
  1,017
  1,062
  1,108
  1,158
  1,210
  1,265
  1,323
  1,385
  1,420
  1,488
  1,560
  1,635
  1,714
  1,797
  1,885
  1,977
  2,074
  2,175
  2,282
  2,395
  2,513
  2,637
  2,767
  2,904
  3,048
  3,199
  3,358
  3,525
Funds from operations, $m
  2,850
  1,387
  1,443
  1,502
  1,565
  1,631
  1,701
  1,774
  1,852
  1,934
  2,020
  2,103
  2,199
  2,299
  2,405
  2,517
  2,634
  2,757
  2,887
  3,023
  3,166
  3,317
  3,475
  3,641
  3,816
  3,999
  4,192
  4,395
  4,607
  4,831
  5,066
Change in working capital, $m
  333
  -112
  -118
  -125
  -133
  -140
  -148
  -156
  -165
  -174
  -183
  -193
  -203
  -214
  -225
  -237
  -249
  -262
  -275
  -289
  -304
  -320
  -336
  -353
  -371
  -390
  -410
  -430
  -452
  -475
  -499
Cash from operations, $m
  2,517
  1,499
  1,561
  1,627
  1,697
  1,771
  1,849
  1,930
  2,017
  2,107
  2,203
  2,296
  2,402
  2,513
  2,630
  2,753
  2,883
  3,019
  3,162
  3,312
  3,470
  3,636
  3,811
  3,994
  4,187
  4,389
  4,602
  4,825
  5,059
  5,306
  5,564
Maintenance CAPEX, $m
  0
  -869
  -907
  -946
  -988
  -1,033
  -1,080
  -1,129
  -1,181
  -1,236
  -1,295
  -1,356
  -1,420
  -1,488
  -1,560
  -1,635
  -1,714
  -1,797
  -1,885
  -1,977
  -2,074
  -2,175
  -2,282
  -2,395
  -2,513
  -2,637
  -2,767
  -2,904
  -3,048
  -3,199
  -3,358
New CAPEX, $m
  -2,494
  -437
  -460
  -487
  -515
  -544
  -574
  -606
  -639
  -674
  -710
  -748
  -788
  -829
  -872
  -918
  -965
  -1,015
  -1,068
  -1,122
  -1,180
  -1,240
  -1,303
  -1,370
  -1,439
  -1,512
  -1,589
  -1,669
  -1,753
  -1,842
  -1,935
Cash from investing activities, $m
  -2,725
  -1,306
  -1,367
  -1,433
  -1,503
  -1,577
  -1,654
  -1,735
  -1,820
  -1,910
  -2,005
  -2,104
  -2,208
  -2,317
  -2,432
  -2,553
  -2,679
  -2,812
  -2,953
  -3,099
  -3,254
  -3,415
  -3,585
  -3,765
  -3,952
  -4,149
  -4,356
  -4,573
  -4,801
  -5,041
  -5,293
Free cash flow, $m
  -208
  193
  195
  194
  194
  194
  195
  195
  196
  197
  198
  192
  194
  196
  198
  201
  203
  206
  210
  213
  217
  221
  225
  230
  235
  240
  246
  252
  258
  265
  272
Issuance/(repayment) of debt, $m
  973
  571
  596
  631
  667
  705
  744
  785
  828
  873
  920
  969
  1,020
  1,074
  1,130
  1,189
  1,251
  1,315
  1,383
  1,454
  1,529
  1,607
  1,689
  1,775
  1,865
  1,959
  2,058
  2,162
  2,272
  2,386
  2,507
Issuance/(repurchase) of shares, $m
  -298
  0
  0
  0
  0
  0
  0
  0
  0
  0
  7
  0
  2
  10
  18
  27
  36
  46
  55
  65
  76
  87
  98
  110
  122
  135
  148
  162
  177
  192
  208
Cash from financing (excl. dividends), $m  
  590
  571
  596
  631
  667
  705
  744
  785
  828
  873
  927
  969
  1,022
  1,084
  1,148
  1,216
  1,287
  1,361
  1,438
  1,519
  1,605
  1,694
  1,787
  1,885
  1,987
  2,094
  2,206
  2,324
  2,449
  2,578
  2,715
Total cash flow (excl. dividends), $m
  357
  764
  790
  825
  861
  899
  939
  980
  1,024
  1,070
  1,125
  1,161
  1,216
  1,280
  1,347
  1,417
  1,490
  1,567
  1,648
  1,733
  1,821
  1,914
  2,012
  2,114
  2,222
  2,334
  2,452
  2,576
  2,707
  2,843
  2,986
Retained Cash Flow (-), $m
  -1,058
  -388
  -416
  -440
  -465
  -492
  -519
  -548
  -578
  -609
  -642
  -676
  -712
  -749
  -789
  -830
  -873
  -918
  -965
  -1,015
  -1,067
  -1,121
  -1,178
  -1,238
  -1,301
  -1,367
  -1,436
  -1,509
  -1,585
  -1,665
  -1,749
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
 
  376
  375
  385
  396
  407
  419
  432
  446
  461
  483
  485
  504
  530
  558
  587
  617
  649
  683
  718
  755
  793
  834
  876
  921
  967
  1,016
  1,068
  1,121
  1,178
  1,237
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
 
  349
  322
  302
  282
  262
  241
  219
  198
  177
  158
  134
  116
  100
  86
  72
  59
  48
  38
  30
  22
  17
  12
  9
  6
  4
  3
  2
  1
  1
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  99.9
  99.9
  99.8
  99.7
  99.6
  99.5
  99.4
  99.2
  99.1
  99.0
  98.8
  98.6
  98.4
  98.3
  98.1
  97.9
  97.7

Royal Caribbean Cruises Ltd. is a cruise company. The Company owns and operates three global cruise brands: Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises (Global Brands). The Company also own joint venture interest in the German brand TUI Cruises, interest in the Spanish brand Pullmantur and interest in the Chinese brand SkySea Cruises (collectively, Partner Brands). Together, its Global Brands and its Partner Brands operate a combined total of 49 ships in the cruise vacation industry with an aggregate capacity of approximately 123,270 berths as of December 31, 2016. As of December 31, 2016, the Company's ships offer a selection of itineraries that call on approximately 535 destinations in 105 countries, covering all seven continents. Royal Caribbean International offers a range of itineraries to the destinations, including Alaska, Asia, Australia, Canada, the Caribbean, the Panama Canal and New Zealand with cruise lengths that range from 2 to 24 nights.

FINANCIAL RATIOS  of  Royal Caribbean Cruises (RCL)

Valuation Ratios
P/E Ratio 20.3
Price to Sales 3.1
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 10.3
Price to Free Cash Flow 1130
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 4.3% 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 -30.6%. 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 214.962 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 $26.0 billion.

RELATED COMPANIES Price Int.Val. Rating
CCL Carnival 65.79 66.69  hold
NCLH Norwegian Crui 54.17 26.81  str.sell
CUK Carnival ADR 65.95 67.30  hold
DIS Walt Disney 99.01 103.16  hold

COMPANY NEWS

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▶ Port Tampa Bay, Tampa International Airport brace for the effects of Irma (Video)   [Sep-06-17 06:00PM  American City Business Journals]
▶ Royal Caribbean raises dividend by 25%   [04:24PM  MarketWatch]
▶ Hurricane Irma Threat Sends Cruise Line Stocks Lower   [Sep-05-17 03:52PM  Bloomberg Video]
▶ 9 Ways to trade stocks at all-time highs   [Sep-01-17 05:00PM  CNBC Videos]
▶ Harvey will hit these industries toonot just oil & gas: NYSE trader   [Aug-30-17 01:35PM  Yahoo Finance Video]
▶ Yahoo Finance Live: Market Movers - Aug 28th, 2017   [07:20AM  Yahoo Finance Video]
▶ [$$] Cruise Ships Give Harvey a Wide Berth   [Aug-26-17 11:51AM  The Wall Street Journal]
▶ Port Tampa Bay gets five more cruises to Havana   [Aug-17-17 03:30PM  American City Business Journals]
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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