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Royal Caribbean Cruises Ltd. (RCL)
Intrinsic Value (DCF)
Current$291.72
→
Intrinsic$153.55
-47%
$78.56$153.55$302.63
Market implies 33% growth for 5 years
Current price reflects execution expectations above 20% growth — not unreasonable for quality businesses.
At $292, the market prices in continued strong cash flow growth (33%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $79 → Bull $303. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 16% | 18% | 20% | 22% |
|---|---|---|---|---|
| 8% | $212 | $236 | $261 | $288 |
| 10% | $121 | $137 | $154 | $172 |
| 12% | $73 | $84 | $97 | $110 |
| 14% | $43 | $52 | $62 | $72 |
Bull Case
- Bull case ($303) offers 4% upside at 24% growth, 8% discount
Bear Case
- Bear case ($79) implies 73% downside at 16% growth, 12% discount
- Price reflects 33% growth expectations vs 20% historical — high bar to clear
- Trading 47% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$2.40B
Year 2$2.88B
Year 3$3.45B
Year 4$4.14B
Year 5$4.97B
Terminal$78.74B
📐 Model Inputs
Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.00BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.