Royal Caribbean Cruises Ltd (NYSE:RCL) is set to report its Q4 earnings this month, with Jefferies updating its forecasts ahead of the release to reflect a modestly above-consensus view for the quarter, while lowering their expectations for the first half of 2026.
The analysts wrote that the changes reflect pricing and cost dynamics observed in recent channel checks, particularly in the Caribbean market.
For Q4, Jefferies maintained its estimates for adjusted EBITDA of $1.47 billion and adjusted earnings per share (EPS) of $2.80, compared with Wall Street expectations of $1.46 billion and $2.79, respectively.
The analysts wrote that they remain in line with company guidance and consensus on capacity growth of 10.3% year-over-year. They expect net yields to rise 3.2% year-over-year, slightly above both guidance and consensus.
The firm projects net cruise costs excluding fuel per available passenger cruise day to decline 6% year over year, broadly consistent with guidance.
“All in, we expect a modest beat to guidance and consensus in Q4, as our most recent pricing checks indicate a low single-digit increase in Q4 despite RCL’s 10% capacity growth,” the analysts wrote.
Looking beyond the quarter, Jefferies flagged potential pressure in early 2026. The firm now expects “moderately choppy H1 2026 results,” citing elevated dry dock days, tougher comparisons, and increased competition in the Caribbean.
For the first quarter of 2026, Jefferies lowered its net yield growth estimate to 1.8% year-over-year from a prior 3%, below the Street’s 2.6%, while raising its outlook for unit costs to 3.1% year-over-year.
As a result, Jefferies reduced its Q1 2026 adjusted EBITDA and EPS forecasts to $1.51 billion and $2.85, from $1.58 billion and $3.13 previously.
The analysts also trimmed their Q2 estimates, but noted that similar trends are expected to be “less impactful” than in the first quarter.
The firm is more constructive on the second half of 2026, as easier comparisons and the opening of Royal Beach Clubs in Nassau and Santorini are expected to provide support.
Despite the first-half revisions, the analysts said the net effect leaves their full-year 2026 outlook largely unchanged, with net yield growth of 3.1%, unit cost growth of 1.6%, adjusted EBITDA of $7.77 billion, and adjusted EPS of $17.50.
Estimates for 2027 were also left largely unchanged, with Jefferies forecasting adjusted EBITDA of $8.56 billion and adjusted EPS of $20.36.
The firm reiterated its ‘Hold’ rating and maintained its $275 price target, in line with current levels.
Royal Caribbean will report its fiscal Q4 and 2025 earnings on January 29.