Royal Caribbean Cruises Ltd. (RCL)

Fundamental analysis
Royal Caribbean Cruises Ltd is a company that operates cruise ships and cruises. Founded in 1968 in Norway, it gradually merged with a Greek cruise company. Today it is headquartered in Miami, USA and has been traded on the NYSE since 1997. It currently has 28 ships and has three more on order. It also owns and operates the world’s largest cruise ship, Icon of the Seas. After an epidemic year in 2020 when the company had to stop all its cruises, the company is now experiencing an unprecedented boom. Like other competitors, RCL has high bookings and growing margins. People are clearly looking for entertainment and want to travel. Similar trends are being seen by airlines and competitors in entertainment cruises. However, RCL has several fundamental advantages. They have a wide portfolio of owned ships, high margins and good additional revenue from on-ship entertainment (restaurants, casinos, entertainment nights etc). The share price has risen over 100% in the last year.
Results
RCL said in their latest press release that there is so much interest in bookings on their ships that they are raising their earnings per share estimate for this year by $0.4 per share. Current earnings expectations are thus in the range of US$9.90 – US$10.10 per share. Bookings for 2024 are at an all-time high even with margin expansion. For 2023, the company had sales of $13.9 billion and revenue of $1.7 billion.
Technical analysis
The PE of 13.55 is still low compared to other “hot” titles, e.g. from the IT segment.
Volume is about 2,500,000 shares per day. Moving averages are on the rise since early 2023. Their spread is solid, this points to a strong uptrend. The RSI is oscillating around the overbought segment, now holding just below. The nearest resistance is at $112.
Conclusion
Fundamentals are the biggest contributor to the share price, with technical analysis taking a back seat. But even that points to upside. The increase in earnings and bookings is unprecedented, and the company has issued a special announcement and revised earnings guidance because of it. On the other hand, the RSI points to the current overboughtness of the stock, and so it may be beneficial to wait for further developments. At the same time, there is always a risk with travel and entertainment stocks that travel restrictions may come to a halt, bringing the entire industry to a halt.
Sources:
https://seekingalpha.com/symbol/RCL
https://finance.yahoo.com/quote/RCL?.tsrc=fin-srch
https://www.rclinvestor.com
https://www.rclinvestor.com/press-releases/release/?id=1690
https://en.wikipedia.org/wiki/Royal_Caribbean_International