RCL Down 5.0% In A Day. How Confident Are You In The Stock?
Royal Caribbean (RCL) stock is down 5% in a day. Already own the stock? Might want to consider reducing position as there is risk – specific to balance sheet and downturn resilience. Consider the following data:
- A $89 Bil company with $16 Bil in revenue currently trading at $334.37.
- Last 12 month revenue growth of 18.6% and operating margin of 24.9%.
- Has Debt to Equity ratio of 0.23 and Cash to Assets ratio of nearly 0 (not enough cash)
- Currently trading at P/E multiple of 31.0 and P/EBIT multiple of 19.9
- Has returned (median) 25.7% within a year following sharp dips (>30% dip in <30 days) since 2010.
While we like to buy dips if the fundamentals check out – for RCL, see Buy or Sell RCL Stock – we are vary of falling knives. Specifically, it is worth trying to answer if things get really bad, and RCL drops 20-30% to $234.06 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Royal Caribbean (RCL) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns.
2022 Inflation Shock
- RCL stock fell 67.7% from a high of $96.98 on 2 June 2021 to $31.28 on 14 July 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 21 June 2023
- Since then, the stock increased to a high of $352.84 on 23 July 2025 , and currently trades at $334.37
| RCL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -67.7% | -25.4% |
| # of Days for Full Recovery | 342 | 464 |
2020 Covid Pandemic
- RCL stock fell 83.5% from a high of $135.05 on 17 January 2020 to $22.33 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 March 2024
| RCL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -83.5% | -33.9% |
| # of Days for Full Recovery | 1463 | 148 |
2018 Correction
- RCL stock fell 33.7% from a high of $134.98 on 26 January 2018 to $89.48 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 17 January 2020
| RCL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -33.7% | -19.8% |
| # of Days for Full Recovery | 389 | 120 |
2008 Global Financial Crisis
- RCL stock fell 88.0% from a high of $45.84 on 2 February 2007 to $5.50 on 2 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 21 December 2010
| RCL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -88.0% | -56.8% |
| # of Days for Full Recovery | 659 | 1480 |
Worried that RCL could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.