Using the PEG framework with analyst consensus forward EPS growth of 14.4% plus 0.4% dividend yield, Royal Caribbean Cruises Ltd. has a fair value of $258.79 based on NTM EPS (FY2026) of $18.03. The current PEG ratio is 1.06.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 14.0% |
| Dividend Yield | +0.4% |
| Adjusted Growth (clamped 8–25%) | 14.4% |
| Fair P/E | 14.4x |
| NTM EPS (FY2026) | $18.03 |
| Fair Value | $258.79 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $15.61 | — | — |
| FY2026E | $18.03 | +15.5% | 20 |
| FY2027E | $20.75 | +15.1% | 19 |
| FY2028E | $23.89 | +15.1% | 14 |
| FY2029E | $27.16 | +13.6% | 9 |
| FY2030E | $30.06 | +10.7% | 13 |
5Y Forward EPS CAGR: 14.0%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $-5.3B | $-20.89 | — |
| FY2022 | $-2.2B | $-8.45 | — |
| FY2023 | $1.7B | $6.31 | — |
| FY2024 | $2.9B | $10.94 | +73.4% |
| FY2025 | $4.3B | $15.61 | +42.7% |
4Y Historical EPS CAGR: 58.0%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.