#3 - Royal Caribbean (NYSE:RCL)
The advice to be greedy when others are fearful took on a new meaning early in 2020. That's particularly true if you were investing in a cruise line like Royal Caribbean Cruises Ltd (NYSE: RCL). The entire industry was in limbo, and many cruise lines had to take on significant debt to survive.
But it’s safe to say the industry is back, and it’s baby boomers who are leading the way. Cruise Lines International Association (CLIA) recently reported that 24% of cruise line passengers are baby boomers, tied with GenX. The former group has more discretionary income for travel. And that’s reflected in the fact that 84% of baby boomer travelers said they planned to take another cruise.
Royal Caribbean is a solid option to play this sector. The company's most recent earnings report showed it met revenue expectations. Royal Caribbean reported a load factor of 111%, showing strong demand and capacity utilization. That is reflected in the company’s strong earnings growth, which it expects to continue into 2025.
At 19x forward earnings, RCL stock has an attractive valuation and analysts have been raising their price targets since the report was released. Plus, in July, the company reinstated its dividend that was suspended in 2020.
About Royal Caribbean Cruises
Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd.
Read More - Current Price
- $231.49
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $220.00 (5.0% Downside)
