0I1W.L
Royal Caribbean Cruises Ltd.
$258.33
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 112.3% above fair value
You pay
$258.33
Bear
$57.44
Fair
$121.67
Bull
$189.76
Bear
$57.44
-77.8%
8% stage 1 growth, 12% discount
Fair
$121.67
-52.9%
13% stage 1 growth, 12% discount
Bull
$189.76
-26.5%
17% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
40.0x
Summary
Using a two-stage FCF DCF with 13% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $121.67 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions