Royal Caribbean Stock Lost 8.5%, Buy Or Wait?
Royal Caribbean (RCL) stock is down 8.5% in a day. Already own the stock? You might want to consider holding it. Planning to buy? This might be your opportunity. Consider the following data:
- Size: Royal Caribbean is a $80 Bil company with $17 Bil in revenue currently trading at $292.95.
- Fundamentals: Last 12 month revenue growth of 8.6% and operating margin of 26.4%.
- Liquidity: Has Debt to Equity ratio of 0.26 and Cash to Assets ratio of 0.01
- Valuation: Royal Caribbean stock is currently trading at P/E multiple of 19.6 and P/EBIT multiple of 15.7
- Has returned (median) 26.4% within a year following sharp dips since 2010. See RCL Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for RCL, see Buy or Sell RCL Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and RCL drops another 20-30% to $205 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
A single stock can be risky, but there is a huge value to a broader, diversified approach we take with the Trefis High Quality Portfolio. Separately, consider what the long-term performance for your portfolio could be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
Below are the details, but before that, as a quick background: RCL is a global cruise operator offering diverse travel experiences through multiple premium brands, with headquarters in Miami and founded in 1968.
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 $365.84 on 28 August 2025 , and currently trades at $292.95
| RCL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -67.7% | -25.4% |
| Time to Full Recovery | 342 days | 464 days |
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% |
| Time to Full Recovery | 1463 days | 148 days |
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% |
| Time to Full Recovery | 389 days | 120 days |
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% |
| Time to Full Recovery | 659 days | 1480 days |
It is a good thing to keep in mind how low RCL could go during a downturn. And you should also check how the stock fared when compared with the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. 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.