RCL
Royal Caribbean Cruises Ltd.
$284.80
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 74.6% above fair value
You pay
$284.80
Bear
$95.12
Fair
$163.12
Bull
$231.86
Bear
$95.12
-66.6%
7% stage 1 growth, 12% discount
Fair
$163.12
-42.7%
11% stage 1 growth, 12% discount
Bull
$231.86
-18.6%
15% stage 1 growth, 12% discount
Adjust Assumptions
11.3%
12.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
36%
Implied Market Multiple
31.1x
Market is pricing in (growth)
16.8%
vs 11.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (52 analysts)
$348.09
Divergence from AlphaVal
53%
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $163.12 per share.
Warnings
Wall Street's average price target is $348.09 (from 52 analysts). Our estimate is 53% 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