Cruise Line Stocks Emerge from the Depths…


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Royal Caribbean stock has become a modern mystery for traders. In fact, it’s the entire cruise line industry. 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.

Is Royal Caribbean Stock Worth Buying?

Cruise line companies were at the forefront of 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 30th 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 over $90 by March.

And on March 1st, 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 there will be enough vaccine supply for all adults by May. Original projections suggested it would take much longer after vaccine rollout was 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.

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Cruise Line Stocks Outlook

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

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

And Royal Caribbean is in as good of a position as any cruise line company at the moment. Specifically, the company had liquidity and financial agreements of 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 fairing before the pandemic brought the world to a halt?

Royal Caribbean Stock Price History

In April of 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.

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But the 2010’s 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 and 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 isn't 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 restriction 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.

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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Read more from Corey Mann at InvestmentU.com

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