What’s Happening With Royal Caribbean Stock?

RCL: Royal Caribbean Cruises logo
Royal Caribbean Cruises

Royal Caribbean stock (NYSE: RCL) has rallied by almost 10% over the last week (five trading days) although it remains down by about 5% over the past month (about 21 trading days). So what’s driving the recent movement in the stock? Demand for cruising has remained strong as Covid-19 restrictions ease with consumers looking for more experiences outdoors. The company saw load factors in the third quarter stand at 96% overall. The company also said that its Black Friday sales represented the cruise line’s single largest booking day in its history. Cruise line operators also appear to be moving to raise pricing. Last week, Royal Caribbean’s rival, Carnival, raised prices for onboard add-ons such as Wi-Fi. That being said, there are challenges as well. The U.S. looks very likely to move into a recession, with the Federal Reserve continuing with its rate hikes. This could prove an issue for RCL, given that it has close to $20 billion in long-term debt.

However, now that RCL stock has seen a decline of about 5% over the last month, will it continue its downward trajectory in the near term, or is a rise imminent? Going by historical performance, there is a 60% chance of a rise in RCL stock over the next month. There were 590 instances in the last 10 years when Royal Caribbean Cruises stock saw a trailing 21-day drop of 4.6% or more. 355 of those instances resulted in RCL stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 355 out of 590, or about 60% chance of a rise in Royal Caribbean Cruises stock over the next month.  See our analysis on  RCL Stock Chance of Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years data

  • After moving 10% or more over five days, the stock rose in the next five days on 49% of the occasions.
  • After moving 6% or more over ten days, the stock rose in the next ten days on 52% of the occasions
  • After moving 5% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 60% of the occasions.
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Returns Jan 2023
MTD [1]
YTD [1]
Total [2]
 RCL Return 11% 11% -33%
 S&P 500 Return 1% 1% 74%
 Trefis Multi-Strategy Portfolio 2% 2% 222%

[1] Month-to-date and year-to-date as of 1/8/2023
[2] Cumulative total returns since the end of 2016

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