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Royal Caribbean Stock: Cruise Line Stocks Are Back Above Water

Royal Caribbean stock has become a modern mystery for traders. In fact, it’s the entire cruise line industry that’s a challenge right now. Investing in cruise line stocks took a major hit due to the COVID-19 pandemic. Yet Royal Caribbean Cruises (NYSE: RCL) is back above water after a great start to 2021.

Royal Caribbean stock price is up due to vaccine rollout

Is Royal Caribbean Stock Worth Buying?

Cruise line companies were in the headlines at the beginning of the COVID-19 pandemic. And for all the wrong reasons.

From coronavirus spikes to shutdowns and falling stock prices, cruise liners were taking one hit after another. And many investors believed the industry would never recover.

Yet a year later, Royal Caribbean stock is gaining momentum. And this is with most of its cruise operations suspended through April 30 due to the pandemic.

So why is the company coming off its most successful month on the stock market for quite some time? The stock price jumped from $65 a share at the beginning of February to more than $90 by March.

And on March 1, the company launched a $1.5 billion public stock offering. The proceeds from the public offering will go to general corporate purposes. But this doesn’t explain the rise in stock price.

You can put this down to the increased vaccine rollout and expectations that America will return to some semblance of normalcy by the summer of 2021.

President Joe Biden stated that there will be enough vaccine supply for all adults by May. Original projections suggested it would take much longer, after the vaccine rollout got off to a slow start. However, things have ramped up considerably over the past month. And so has the Royal Caribbean stock price.

This doesn’t mean cruise stocks will continue to flourish into the spring. But it’s a bright light for an industry that has seen nothing but darkness over the past year.

Cruise Line Stocks Outlook

A once-grim outlook is now leaning toward promising. Cruise liners are preparing for a resurgence once the coronavirus vaccine rollout is complete.

And many investors believe this resurgence will surpass the industry’s pre-coronavirus highs. Americans are anxious to travel and ready to make up for lost time. Royal Caribbean stock is sure to benefit.

And Royal Caribbean is in as good a position as any cruise line company at the moment. Specifically, the company had liquidity and financial agreements amounting to about $4.4 billion to start 2021. And since the start of the year, the stock price has jumped nearly 20%.

So how was the company faring before the pandemic brought the world to a halt?

Royal Caribbean Stock Price History

In April 1993, Royal Caribbean went public on the New York Stock Exchange. The company issued 11.5 million shares at $9 a share.

The company has come a long way since then. By the start of the new millennium, the stock price was closing in on $50. However, it struggled over the next 10 years to make its mark in a growing industry. And by 2010, the stock price was back down to $25 a share. In fact, it fell as low as $5.93 in 2009.

But the 2010s were very good to Royal Caribbean. And before the pandemic hit in March of 2020, Royal Caribbean stock was trading as high as $135.05.

Then came COVID-19. And the industry didn’t look like it was going to stay afloat. On February 14, 2020, Royal Caribbean stock was trading for $113.16. A month later, it was down to $23.81.

The industry was at a standstill. All operations were halted. And to this day, cruise liners are still suspended due to the pandemic.

But the vaccine is here and the rollout is picking up steam. Americans are ready to return to the market, and Royal Caribbean is preparing for a travel boom.

Time is the only factor to consider. How long will it take before the majority of adults are vaccinated? Moreover, how quickly, or slowly, will the country resume its normal activities? Will travel restrictions begin to lighten? And will everyone rush into travel, as projections suggest?

Investing in Cruise Line Stocks

Cruise line stocks are on the upswing. But there’s a long way to go before the industry has any certainty.

If you want to stay ahead of the trends, sign up for the Profit Trends e-letter in the box to the right. The team at Profit Trends delivers daily stock picks, tips and analysis for investors who are looking to build wealth and enhance their portfolio.

And you may want to start by considering cruise line companies. One thing is for sure: Royal Caribbean stock will be one to watch as the vaccine rollout ramps up even further and we close in on the summer months.


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