RCL – Market expectations are for declining Uniform ROA, but management is confident in industry tailwinds and operational sustainability

• Royal Caribbean Cruises Ltd (RCL:USA) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings, with a 17.9x Uniform P/E. At these levels, markets are pricing in bearish expectations for the firm, but management is confident in tailwinds across the industry and overall performance
• Specifically, management is confident in their ability to sustain strong performance across their brand segments. Moreover, they are confident in their ability to maintain positive customer satisfaction ratings in their Royal Caribbean International segment, and in the performance of Celebrity Edge, particularly going into H2 2018. Additionally, they are confident in their ability to meet raised guidance for net yield, and in the sustainability of strength across the entire cruise industry