Royal Caribbean Cruises Ltd (NYSE:RCL) shares are trading slightly lower Wednesday afternoon, despite the company posting impressive second-quarter results and an outlook that spurred a wave of analyst upgrades. Here’s what investors need to know.
What To Know: On Tuesday the cruise operator announced strong second-quarter earnings, reporting an adjusted EPS of $4.38, sailing past Wall Street’s consensus estimate of $4.05.
Revenue for the quarter also beat expectations, coming in at $4.54 billion. The company highlighted that booked load factors and rates are at an all-time high for all future sailings, driven by strong demand and resilient consumer spending.
Buoyed by the strong performance, Royal Caribbean raised its full-year adjusted EPS guidance to a range of $15.41 to $15.55. The company also increased its full-year adjusted EBITDA forecast to approximately $5.95 billion. Management credited the results to strong ticket pricing and robust onboard revenue.
In response to the report, Wall Street analysts were overwhelmingly positive on Wednesday. A flurry of firms reiterated their Buy or Overweight ratings and increased their price targets.
Stifel raised its target to $420, Citigroup increased its target to $399, and JPMorgan lifted its target to $367. Despite the strong results and bullish analyst sentiment, the stock’s modest pullback may suggest a sell-the-news reaction or minor profit-taking by investors after the stock’s 111% run higher over the past year.
Benzinga Edge Rankings: According to Benzinga Edge stock rankings, Royal Caribbean exhibits extremely strong momentum with a score of 93.86 out of 100. The company also receives a high score for growth at 77.30, reflecting its solid financial expansion.
Conversely, its value score is more moderate at 47.28, suggesting the stock may not be considered undervalued based on current metrics. Reinforcing the high momentum score, the data also shows a positive price trend across short, medium, and long-term timeframes.
Price Action: According to data from Benzinga Pro, RCL shares are trading lower by 1.25% to $330.25 Wednesday afternoon. The stock has a 52-week high of $355.91 and a 52-week low of $130.08.
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How To Buy RCL Stock
By now you're likely curious about how to participate in the market for Royal Caribbean – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
In the case of Royal Caribbean, which is trading at $332.15 as of publishing time, $100 would buy you 0.3 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
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