Royal Caribbean’s stock plunge raises hopes for a 2026 rebound
Royal Caribbean’s stock has fallen nearly 30% from its 52-week peak after a sell-off that began in September 2025. Despite the decline, the company’s financial position remains strong, with low debt levels and a plan to boost shareholder returns. Analysts now suggest a potential recovery could take shape by 2026.
The drop in share price has raised questions about Royal Caribbean's revenue growth in the Caribbean for 2026. Even a 1% shift in yields there could impact the company's market value by around $1.2 billion, based on a typical valuation multiple of 15 times earnings. Yet, the business maintains a solid balance sheet, with gross leverage in the low 3x range and access to a $6.4 billion credit facility.
The company expects Caribbean yields to grow by 2% to 3% next year. This forecast, along with efforts to cut debt and increase free cash flow, has led to a $1 billion share buyback programme. Meanwhile, expansion into river cruises—set to launch in 2027—could open another revenue stream.
Analysts like William Blair have kept an 'Outperform' rating on the stock, predicting improved earnings per share by 2026. The recent share price dip has also made the valuation more attractive, which may help rebuild investor trust.
Royal Caribbean's financial strength and planned buybacks aim to offset recent market concerns. If Caribbean yields meet the 2% to 3% growth target, the company could see a rebound in 2026. The addition of river cruises in 2027 may further support long-term revenue.
