Royal Caribbean Cruises Plunges 5.68% Amid Tariff Fears, Analyst Caution

On April 3, 2025, Royal Caribbean Cruises experienced a significant drop of 5.68% in pre-market trading, reflecting investor concerns and market sentiment.

Recent news highlights several factors that could be influencing the stock's performance. Analysts have noted that earnings for Royal Caribbean Cruises are forecast to grow by 15.47% per year, which is a positive indicator for long-term investors. However, the current trading price is 45.3% below the estimated fair value, suggesting that the stock may be undervalued.

Additionally, tariff tensions between the U.S. and Canada could impact the company's revenue. A potential 10% decline in Canadian travel to the U.S. could result in 2 million fewer visits and $2.1 billion in lost spending, which would directly affect Royal Caribbean's business.

Jefferies has started coverage on Royal Caribbean with a Hold rating and a price target of $230, indicating that the stock is already priced for perfection. This cautious outlook from a major financial institution could be contributing to the recent drop in the stock price.

Despite these challenges, some analysts believe that Royal Caribbean Cruises remains undervalued and presents a buying opportunity. The company has shown significant growth in earnings, with a 69.5% increase over the past year, which could attract investors looking for value in the market.