It looked bad for the cruise industry for a while there. With cruises all but shuttered by COVID-19 restrictions and the cruises that did come back looking more like disaster movies than a good time, the end result wasn’t good news for cruise lines. However, that’s changing, and in an unexpectedly big way. Royal Caribbean (NYSE:RCL) is leading the charge back, and it’s up fractionally in Monday afternoon’s trading.
While the macroeconomic picture looks like a disaster, there are still plenty of cruisers looking to get away from it all—and it seems like there’s never been quite so much to get away from. In fact, Royal Caribbean is already reporting record-high bookings, along with higher prices. So, too, are the figures out of its contemporaries in the field, Norwegian (NYSE:NLCH) and Carnival (NYSE:CCL).
But Royal Caribbean proved special, noted senior equity research analyst Brandt Montour. It took a restrained stance on adding new equity during the pandemic, which means its equity is worth that much more since it’s less spread out.
Not Skimping
Better yet, Royal Caribbean has also focused on development, which has made it a much more attractive prospect for those looking to hit the seas. One report detailed 14 separate advancements that Royal Caribbean made just for its “Icon of the Seas” vessel.
These included everything from the ability to chat with Guest Services personnel through a mobile app to elevators that go to specific destinations rather than simply from one deck to another. Furthermore, the Aquadome, a massive, domed structure on the deck, serves as a quiet space with a waterfall by day and a dazzlingly lit structure by night. These measures draw interest and keep customers coming back, even with forbidding economic conditions.
Is Royal Caribbean Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on RCL stock based on 10 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 103.45% rally in its share price over the past year, the average RCL price target of $150.67 per share implies 17.44% upside potential.
