RCL
Royal Caribbean Cruises Ltd.
$256.10
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 26.2% above fair value
You pay
$256.10
Bear
$95.83
Fair
$202.89
Bull
$316.37
Bear
$95.83
-62.6%
8% stage 1 growth, 12% discount
Fair
$202.89
-20.8%
13% stage 1 growth, 12% discount
Bull
$316.37
+23.5%
17% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
39.3x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $350.92 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $202.89 per share.
Warnings
Wall Street's average price target is $350.92 (from 52 analysts). Our estimate is 65% below the consensus -- consider that gap carefully.
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