Record Bookings Cannot Hide Royal Caribbean’s Growing Fuel Problem

• Royal Caribbean (RCL) expects adjusted earnings per share of $18 in 2026, after previously reporting full-year net profit of $4.27 billion in 2025, up 48% year-on-year. Two-thirds of 2026 capacity has been booked at a record pace, and Legend of the Seas will arrive in the second quarter of 2026.

• A surge in oil prices to $100 a barrel has exposed Royal Caribbean to the risk of cost inflation, with hedge coverage falling to just 16% by 2028, while the company faces $3.2 billion in debt maturing in 2026 and $5 billion in capital expenditure commitments.

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royal caribbean group Popular cruise line RCL (NYSE: RCL ) is poised to see real momentum in 2026, but a viral post on r/wallstreetbets is crystallizing risks that bulls have been glossing over: Oil prices are approaching $100 a barrel, and Royal Caribbean just committed to spending about $5 billion in capital expenditures this year alone. Despite the company’s 2026 adjusted earnings per share of $18, the company’s shares have fallen 15% in the past month and are trading around $267.

The good news is that the bull case is real, as two-thirds of 2026 capacity is already booked at a record pace, the company’s full-year 2025 net profit is $4.27 billion, up 31% year-on-year, and CEO Jason Liberty described the WAVE season as the “highest seven-week booking week in the company’s history.” Legend of the Seas is expected to enter service in the second quarter of 2026 and will add new capacity to the already full fleet. Fuel is the growing number of bear theories online.

On March 13, WTI crude oil hit a 12-month high of $97.31, before falling back to $92.46 as of March 16. The 46% gain in a single month brings oil prices close to the widely watched threshold of $100 a barrel, a level that has historically put a severe squeeze on cruise operators.

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A post titled “The cruise industry will be buried by the Middle East conflict” received more than 800 likes in less than 24 hours, with a like rate of 96%, making RCL’s Reddit sentiment score reach 8 points (out of 100 points), which is very pessimistic.

Cruise industry to be buried by Middle East conflict 10k Puts
By u/Electrical_Trash_992 at wallstreetbets

Overall, “Total fuel costs for cruise ships have doubled by 2022 and we will see oil disruptions much worse than in 2022.” The composite sentiment score is 36.5 out of 100, with moderate confidence bearish, but news sentiment remains relatively constructive at 65 out of 100. Core retail issues:

• Oil prices rose 36% year-on-year, hedging coverage will drop to 16% by 2028, and future profit margins will be at risk

• RCL completed a debt refinancing in 2025, replacing debt in 2026 with notes due in 2033 and 2038, significantly reducing near-term maturities.

• Geopolitical disruptions, including China itinerary modifications, have resulted in a 30 basis point headwind to 2026 guidance, factors that are already showing up in the data

The analyst consensus target price is $348.52, which represents a 29% upside from current levels, with 23 analysts rating the stock as a Moderate Buy, 18 as a Buy, 4 as a Hold, and 1 as a Strong Buy. Valuation metrics support the bullish backdrop: Forward 2026 P/E of 14.92x is reasonable for a company with 16.9% earnings growth, while the consensus revenue forecast is $19.95 billion, up 11.2% year over year. The real question heading into the second quarter is whether fuel costs and debt service will eat up enough cash flow to put pressure on the $1.50 quarterly dividend and $2 billion repurchase authorization that shareholders currently enjoy.

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