Intrinsic value of Royal Caribbean Cruises - RCL

Previous Close

$107.17

  Intrinsic Value

$75.93

stock screener

  Rating & Target

sell

-29%

Previous close

$107.17

 
Intrinsic value

$75.93

 
Up/down potential

-29%

 
Rating

sell

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 0001), $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 22.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.50
  6.35
  6.21
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
Revenue, $m
  9,348
  9,942
  10,560
  11,203
  11,874
  12,573
  13,302
  14,062
  14,856
  15,685
  16,551
  17,457
  18,404
  19,394
  20,430
  21,515
  22,650
  23,840
  25,085
  26,390
  27,758
  29,191
  30,694
  32,270
  33,922
  35,654
  37,472
  39,378
  41,378
  43,476
Variable operating expenses, $m
  1,541
  1,637
  1,737
  1,841
  1,949
  2,062
  2,180
  2,303
  2,431
  2,565
  2,677
  2,823
  2,976
  3,136
  3,304
  3,479
  3,663
  3,855
  4,057
  4,268
  4,489
  4,721
  4,964
  5,218
  5,486
  5,766
  6,060
  6,368
  6,691
  7,031
Fixed operating expenses, $m
  5,865
  5,994
  6,126
  6,261
  6,399
  6,539
  6,683
  6,830
  6,981
  7,134
  7,291
  7,452
  7,615
  7,783
  7,954
  8,129
  8,308
  8,491
  8,678
  8,869
  9,064
  9,263
  9,467
  9,675
  9,888
  10,106
  10,328
  10,555
  10,787
  11,025
Total operating expenses, $m
  7,406
  7,631
  7,863
  8,102
  8,348
  8,601
  8,863
  9,133
  9,412
  9,699
  9,968
  10,275
  10,591
  10,919
  11,258
  11,608
  11,971
  12,346
  12,735
  13,137
  13,553
  13,984
  14,431
  14,893
  15,374
  15,872
  16,388
  16,923
  17,478
  18,056
Operating income, $m
  1,943
  2,311
  2,697
  3,102
  3,526
  3,971
  4,438
  4,929
  5,444
  5,986
  6,584
  7,182
  7,812
  8,475
  9,172
  9,906
  10,679
  11,494
  12,351
  13,254
  14,205
  15,208
  16,264
  17,376
  18,548
  19,783
  21,084
  22,455
  23,899
  25,421
EBITDA, $m
  2,976
  3,408
  3,861
  4,335
  4,831
  5,351
  5,897
  6,469
  7,069
  7,700
  8,362
  9,058
  9,790
  10,559
  11,368
  12,218
  13,114
  14,055
  15,047
  16,090
  17,188
  18,345
  19,562
  20,844
  22,194
  23,615
  25,111
  26,687
  28,346
  30,093
Interest expense (income), $m
  257
  407
  447
  489
  534
  580
  628
  678
  730
  784
  841
  900
  962
  1,027
  1,095
  1,166
  1,240
  1,318
  1,399
  1,484
  1,573
  1,667
  1,765
  1,867
  1,975
  2,088
  2,206
  2,330
  2,460
  2,597
  2,740
Earnings before tax, $m
  1,535
  1,864
  2,208
  2,568
  2,947
  3,344
  3,761
  4,199
  4,660
  5,144
  5,683
  6,220
  6,785
  7,380
  8,006
  8,666
  9,362
  10,094
  10,867
  11,681
  12,539
  13,443
  14,396
  15,401
  16,460
  17,577
  18,754
  19,995
  21,303
  22,681
Tax expense, $m
  415
  503
  596
  693
  796
  903
  1,015
  1,134
  1,258
  1,389
  1,534
  1,679
  1,832
  1,993
  2,162
  2,340
  2,528
  2,726
  2,934
  3,154
  3,385
  3,630
  3,887
  4,158
  4,444
  4,746
  5,064
  5,399
  5,752
  6,124
Net income, $m
  1,121
  1,361
  1,612
  1,875
  2,151
  2,441
  2,745
  3,065
  3,402
  3,755
  4,149
  4,540
  4,953
  5,387
  5,845
  6,326
  6,834
  7,369
  7,933
  8,527
  9,153
  9,813
  10,509
  11,243
  12,016
  12,831
  13,691
  14,596
  15,551
  16,557

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  23,787
  25,298
  26,870
  28,507
  30,213
  31,992
  33,846
  35,781
  37,801
  39,911
  42,115
  44,419
  46,829
  49,349
  51,985
  54,745
  57,635
  60,661
  63,830
  67,151
  70,631
  74,278
  78,102
  82,111
  86,315
  90,724
  95,348
  100,198
  105,287
  110,625
Adjusted assets (=assets-cash), $m
  23,787
  25,298
  26,870
  28,507
  30,213
  31,992
  33,846
  35,781
  37,801
  39,911
  42,115
  44,419
  46,829
  49,349
  51,985
  54,745
  57,635
  60,661
  63,830
  67,151
  70,631
  74,278
  78,102
  82,111
  86,315
  90,724
  95,348
  100,198
  105,287
  110,625
Revenue / Adjusted assets
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
  0.393
Average production assets, $m
  21,398
  22,757
  24,172
  25,645
  27,179
  28,779
  30,447
  32,188
  34,005
  35,903
  37,886
  39,959
  42,126
  44,393
  46,765
  49,248
  51,847
  54,569
  57,420
  60,407
  63,538
  66,819
  70,259
  73,865
  77,647
  81,613
  85,773
  90,136
  94,714
  99,516
Working capital, $m
  -3,066
  -3,261
  -3,464
  -3,675
  -3,895
  -4,124
  -4,363
  -4,612
  -4,873
  -5,145
  -5,429
  -5,726
  -6,036
  -6,361
  -6,701
  -7,057
  -7,429
  -7,819
  -8,228
  -8,656
  -9,105
  -9,575
  -10,068
  -10,584
  -11,126
  -11,695
  -12,291
  -12,916
  -13,572
  -14,260
Total debt, $m
  8,274
  9,061
  9,880
  10,733
  11,622
  12,548
  13,515
  14,523
  15,575
  16,675
  17,823
  19,023
  20,279
  21,591
  22,965
  24,403
  25,908
  27,485
  29,136
  30,866
  32,680
  34,580
  36,572
  38,661
  40,851
  43,148
  45,557
  48,084
  50,735
  53,517
Total liabilities, $m
  12,393
  13,180
  13,999
  14,852
  15,741
  16,668
  17,634
  18,642
  19,695
  20,794
  21,942
  23,143
  24,398
  25,711
  27,084
  28,522
  30,028
  31,604
  33,255
  34,986
  36,799
  38,699
  40,691
  42,780
  44,970
  47,267
  49,676
  52,203
  54,854
  57,636
Total equity, $m
  11,394
  12,118
  12,871
  13,655
  14,472
  15,324
  16,212
  17,139
  18,107
  19,117
  20,173
  21,277
  22,431
  23,638
  24,901
  26,223
  27,607
  29,056
  30,575
  32,165
  33,832
  35,579
  37,411
  39,331
  41,345
  43,457
  45,672
  47,995
  50,432
  52,990
Total liabilities and equity, $m
  23,787
  25,298
  26,870
  28,507
  30,213
  31,992
  33,846
  35,781
  37,802
  39,911
  42,115
  44,420
  46,829
  49,349
  51,985
  54,745
  57,635
  60,660
  63,830
  67,151
  70,631
  74,278
  78,102
  82,111
  86,315
  90,724
  95,348
  100,198
  105,286
  110,626
Debt-to-equity ratio
  0.730
  0.750
  0.770
  0.790
  0.800
  0.820
  0.830
  0.850
  0.860
  0.870
  0.880
  0.890
  0.900
  0.910
  0.920
  0.930
  0.940
  0.950
  0.950
  0.960
  0.970
  0.970
  0.980
  0.980
  0.990
  0.990
  1.000
  1.000
  1.010
  1.010
Adjusted equity ratio
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,121
  1,361
  1,612
  1,875
  2,151
  2,441
  2,745
  3,065
  3,402
  3,755
  4,149
  4,540
  4,953
  5,387
  5,845
  6,326
  6,834
  7,369
  7,933
  8,527
  9,153
  9,813
  10,509
  11,243
  12,016
  12,831
  13,691
  14,596
  15,551
  16,557
Depreciation, amort., depletion, $m
  1,033
  1,097
  1,164
  1,233
  1,305
  1,380
  1,458
  1,540
  1,625
  1,714
  1,779
  1,876
  1,978
  2,084
  2,196
  2,312
  2,434
  2,562
  2,696
  2,836
  2,983
  3,137
  3,299
  3,468
  3,645
  3,832
  4,027
  4,232
  4,447
  4,672
Funds from operations, $m
  2,154
  2,458
  2,775
  3,108
  3,456
  3,821
  4,204
  4,605
  5,027
  5,470
  5,927
  6,416
  6,931
  7,471
  8,040
  8,638
  9,268
  9,931
  10,629
  11,363
  12,136
  12,950
  13,808
  14,711
  15,662
  16,663
  17,717
  18,828
  19,998
  21,229
Change in working capital, $m
  -187
  -195
  -203
  -211
  -220
  -229
  -239
  -249
  -260
  -272
  -284
  -297
  -311
  -325
  -340
  -356
  -372
  -390
  -409
  -428
  -449
  -470
  -493
  -517
  -542
  -568
  -596
  -625
  -656
  -688
Cash from operations, $m
  2,341
  2,653
  2,978
  3,319
  3,676
  4,050
  4,443
  4,855
  5,287
  5,742
  6,212
  6,713
  7,241
  7,796
  8,380
  8,994
  9,641
  10,321
  11,037
  11,791
  12,585
  13,421
  14,301
  15,227
  16,203
  17,231
  18,313
  19,453
  20,653
  21,917
Maintenance CAPEX, $m
  -943
  -1,005
  -1,068
  -1,135
  -1,204
  -1,276
  -1,351
  -1,429
  -1,511
  -1,596
  -1,686
  -1,779
  -1,876
  -1,978
  -2,084
  -2,196
  -2,312
  -2,434
  -2,562
  -2,696
  -2,836
  -2,983
  -3,137
  -3,299
  -3,468
  -3,645
  -3,832
  -4,027
  -4,232
  -4,447
New CAPEX, $m
  -1,306
  -1,359
  -1,414
  -1,473
  -1,535
  -1,600
  -1,668
  -1,741
  -1,817
  -1,898
  -1,983
  -2,073
  -2,167
  -2,267
  -2,372
  -2,483
  -2,599
  -2,722
  -2,851
  -2,987
  -3,131
  -3,281
  -3,440
  -3,606
  -3,782
  -3,966
  -4,160
  -4,363
  -4,578
  -4,803
Cash from investing activities, $m
  -2,249
  -2,364
  -2,482
  -2,608
  -2,739
  -2,876
  -3,019
  -3,170
  -3,328
  -3,494
  -3,669
  -3,852
  -4,043
  -4,245
  -4,456
  -4,679
  -4,911
  -5,156
  -5,413
  -5,683
  -5,967
  -6,264
  -6,577
  -6,905
  -7,250
  -7,611
  -7,992
  -8,390
  -8,810
  -9,250
Free cash flow, $m
  92
  290
  495
  711
  937
  1,174
  1,423
  1,685
  1,959
  2,247
  2,543
  2,862
  3,198
  3,552
  3,924
  4,316
  4,729
  5,165
  5,624
  6,108
  6,618
  7,156
  7,724
  8,323
  8,954
  9,620
  10,322
  11,063
  11,844
  12,668
Issuance/(repayment) of debt, $m
  735
  787
  819
  853
  889
  926
  966
  1,008
  1,052
  1,099
  1,148
  1,200
  1,255
  1,313
  1,374
  1,438
  1,505
  1,576
  1,651
  1,730
  1,813
  1,900
  1,992
  2,089
  2,190
  2,297
  2,409
  2,527
  2,651
  2,781
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  735
  787
  819
  853
  889
  926
  966
  1,008
  1,052
  1,099
  1,148
  1,200
  1,255
  1,313
  1,374
  1,438
  1,505
  1,576
  1,651
  1,730
  1,813
  1,900
  1,992
  2,089
  2,190
  2,297
  2,409
  2,527
  2,651
  2,781
Total cash flow (excl. dividends), $m
  827
  1,076
  1,314
  1,564
  1,826
  2,101
  2,389
  2,693
  3,011
  3,347
  3,691
  4,063
  4,453
  4,864
  5,298
  5,754
  6,235
  6,741
  7,275
  7,838
  8,431
  9,057
  9,716
  10,411
  11,144
  11,917
  12,731
  13,590
  14,495
  15,450
Retained Cash Flow (-), $m
  -692
  -724
  -753
  -784
  -817
  -852
  -888
  -927
  -968
  -1,011
  -1,056
  -1,104
  -1,154
  -1,207
  -1,263
  -1,322
  -1,384
  -1,449
  -1,518
  -1,591
  -1,667
  -1,747
  -1,832
  -1,920
  -2,014
  -2,112
  -2,215
  -2,323
  -2,437
  -2,557
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
  135
  353
  561
  780
  1,009
  1,249
  1,501
  1,766
  2,044
  2,336
  2,636
  2,959
  3,299
  3,657
  4,035
  4,432
  4,851
  5,292
  5,757
  6,247
  6,764
  7,310
  7,885
  8,491
  9,130
  9,805
  10,516
  11,267
  12,058
  12,892
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
  128
  314
  468
  604
  722
  820
  897
  953
  987
  1,001
  993
  969
  929
  876
  811
  739
  661
  580
  501
  424
  351
  286
  227
  177
  134
  100
  72
  51
  35
  23
Current shareholders' claim on cash, %
  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
  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
  100.0
  100.0
  100.0
  100.0

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 17.9
Price to Sales 2.7
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 9.1
Price to Free Cash Flow 999.9
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 $8777.845 million for the last fiscal year's total revenue generated by Royal Caribbean Cruises. The default revenue input number comes from 0001 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 6.5% 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 5.7%, 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 16.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5739 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 5.4% 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 228.9%.

Life of production assets of 21.3 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 -32.8%. 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 - $10702.303 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 208.97 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 $22.4 billion.

RELATED COMPANIES Price Int.Val. Rating
CCL Carnival 58.54 9.45  str.sell
NCLH Norwegian Crui 48.75 20.05  str.sell
DIS Walt Disney 118.00 221.57  str.buy
LIND Lindblad Exped 13.28 22.60  buy

COMPANY NEWS

▶ Is Royal Caribbean Cruises Ltd (NYSE:RCL) Overpaying Its CEO?   [Nov-12-18 11:12AM  Simply Wall St.]
▶ Major cruise company debuts its largest ship ever at PortMiami   [Nov-09-18 02:15PM  American City Business Journals]
▶ Is It Time to Invest in Cuba?   [Nov-05-18 08:52AM  Investopedia]
▶ Royal Caribbean bets big on Miami   [Nov-02-18 02:05PM  CNBC Videos]
▶ Royal Caribbean opens new terminal at PortMiami   [01:51PM  American City Business Journals]
▶ It's Time to Set Sail on Cruise Ship Stocks   [Oct-29-18 02:32PM  Motley Fool]
▶ Royal Caribbean: 3Q Earnings Snapshot   [08:20AM  Associated Press]
▶ Royal Caribbean Cruises Q3 Earnings Preview   [Oct-24-18 03:16PM  Benzinga]
▶ This South Florida seaport just had its strongest year ever   [Oct-23-18 03:32PM  American City Business Journals]
▶ [$$] MSC Orders Four Luxury Ships; Rooms Cost Up to $14,000 a Week   [Oct-18-18 07:45PM  The Wall Street Journal]
▶ John Rogers Comments on Royal Caribbean Cruises   [Oct-17-18 04:40PM  GuruFocus.com]
▶ Norwegian and Royal Caribbean add Seattle mega-cruise ship sailings to Alaska   [Oct-12-18 05:53PM  American City Business Journals]
▶ Silversea Cruises Orders Three New Ships   [Oct-08-18 07:30AM  PR Newswire]
▶ Port Tampa Bay hits major milestone of 1M cruise ship passengers   [Sep-24-18 06:59AM  American City Business Journals]
▶ Yahoo Finance Live: Market Movers - Sep 12th, 2018   [Sep-12-18 06:55AM  Yahoo Finance Video]
▶ 6 Companies That Invest in Themselves   [Sep-10-18 11:56AM  Kiplinger]
▶ Royal Caribbean Sailing Higher After Upgrade   [Aug-29-18 03:37PM  Benzinga]
▶ Port Manatee in active discussions to capture cruise, ferry business   [Aug-21-18 06:38AM  American City Business Journals]
▶ 15 Stocks to Buy Ahead of the Fall Season   [Aug-09-18 03:12PM  InvestorPlace]
▶ Port Tampa Bay cruising to capture more of Cuba, hit 1M passengers   [05:00AM  American City Business Journals]
▶ Royal Caribbean: 2Q Earnings Snapshot   [08:27AM  Associated Press]
▶ Royal Caribbean completes Silversea Cruises acquisition   [Aug-01-18 02:46PM  American City Business Journals]
▶ Norwegian Cruise Line Makes Waves Ahead of Earnings   [Jul-18-18 02:56PM  Barrons.com]
▶ Royal Caribbean: This Stock Shouldn't Be Docked   [Jul-16-18 05:53PM  Barrons.com]
▶ MSC Cruises inks pact with county to build terminal at PortMiami   [Jul-11-18 06:41PM  American City Business Journals]
▶ How PortMiami will keep its title as the Cruise Capital of the World   [02:09PM  American City Business Journals]

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