What Happened?

Shares of cruise vacation company Royal Caribbean (NYSE: RCL) fell 10.3% in the afternoon session after the company reported third-quarter results that missed revenue expectations and provided a disappointing profit forecast. While the cruise operator's adjusted earnings per share of $5.75 beat analyst estimates, its revenue of $5.14 billion fell slightly short of Wall Street's projections. Looking ahead, the outlook concerned investors as the company's earnings guidance for the next quarter also missed expectations. Although management slightly raised its full-year profit guidance, this was not enough to offset the revenue miss and the weaker near-term outlook, leading to a negative reaction from the market.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Royal Caribbean? Access our full analysis report here.

What Is The Market Telling Us

Royal Caribbean’s shares are quite volatile and have had 16 moves greater than 5% over the last year. But moves this big are rare even for Royal Caribbean and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 7 days ago when the stock gained 3.2% on the news that an analyst reiterated a bullish stance on the stock ahead of its upcoming earnings report. William Blair analyst Sharon Zackfia maintained a Buy rating on Royal Caribbean, pointing to a positive outlook for the company. The view was based on expectations for a strong third-quarter performance, driven by widespread momentum across its operations. This positive sentiment was also supported by expectations of solid ticket pricing and onboard spending. Further boosting investor confidence, the company recently raised its quarterly dividend from $0.75 to $1.00. Royal Caribbean was expected to announce its third-quarter earnings on October 28th.

Royal Caribbean is up 27% since the beginning of the year, but at $290.80 per share, it is still trading 20.5% below its 52-week high of $365.84 from August 2025. Investors who bought $1,000 worth of Royal Caribbean’s shares 5 years ago would now be looking at an investment worth $5,474.

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