Royal Caribbean Group (NYSE: RCL): The Best-Of-Breed For Investing?


Capital Research & Management Co. recently announced the acquisition of new stake in Royal Caribbean Group (NYSE:RCL). The institutional investor has increased its shareholding in the Consumer Cyclical company by 16.63% to 16.48 million shares with purchase of 2.35 million shares. This fresh investment now brings its stake to 7.87% valued currently at $802.97 million. In addition, BlackRock Fund Advisors raised its holdings by 95575.0 to 8.54 million shares. And Canada Pension Plan Investment Bo. has lifted its position by 0.00% or 31.0 shares – to 8.1 million shares.

With over 12.2 million Royal Caribbean Group (RCL) shares trading Monday and a closing price of $64.43 on the day, the dollar volume was approximately $785.82 million. The shares have shown a positive weekly performance of 6.87% and its price on 08/24/20 gained nearly 4.71%. Currently, there are 209.39M common shares owned by the public and among those 176.12M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 18 analysts who have offered their price forecasts for RCL have a consensus price objective of $53.92. The analysts have set the share’s price value over the next 12 months at a high of $75.00 and a low of $34.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Royal Caribbean Group stock is 2.60 for the next 12 months. The average price target is -6.5% below its last price level and a downside to the estimated low will see the stock lose -89.5% over that period. But an upside of 14.09% will see the stock hit the forecast high price target while mean target price for the stock is $53.50.

Insiders at the company have transacted a total of 80 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 32 of these insider trades were purchases, accounting for 375,716 shares. Insider sales of the common stock occurred on 48 occasions, with total insider shares sold totaling 259,829 shares.

The top 3 mutual fund holders in Royal Caribbean Group are American Funds Growth Fund of Ame, American Funds Investment Company, and Vanguard Total Stock Market Index. American Funds Growth Fund of Ame owns 10.22 million shares of the company’s stock, all valued at over $497.74 million. The company bought an additional 1.16 million shares recently to bring their total holdings to about 4.88% of the shares outstanding. American Funds Investment Company bought 0.82 million shares to see its total holdings expand to 6.02 million shares valued at over $293.32 million and representing 2.88% of the shares outstanding. Vanguard Total Stock Market Index sold 2602.0 shares to bring its total holdings to over 4.78 million shares at a value of $232.78 million. Vanguard Total Stock Market Index now owns shares totaling to 2.28% of the shares outstanding.

Shares of Royal Caribbean Group (NYSE: RCL) opened at $63.04, up $1.51 from a prior closing price of $61.53. However, the script later closed the day at $64.43, up 4.71%. The company’s stock has a 5-day price change of 6.87% and 30.00% over the past three months. RCL shares are trading -51.74% year to date (YTD), with the 12-month market performance down to -37.16% lower. It has a 12-month low price of $19.25 and touched a high of $135.32 over the same period. Currently, 12.2 million shares have been traded, compared to an average intraday trading volume of 16.66 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 17.53%, 20.59%, and -14.82% respectively.

Institutional ownership of Royal Caribbean Group (NYSE: RCL) shares accounts for 63.00% of the company’s 209.39M shares outstanding. Mutual fund holders own 31.62%, while other institutional holders and individual stakeholders account for 40.72% and 23.88% respectively.

It has a market capitalization of $13.83B and a beta (3y monthly) value of 2.59. The earnings-per-share (ttm) stands at -$9.23. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.72% over the week and 5.72% over the month.

Analysts forecast that Royal Caribbean Group (RCL) will achieve an EPS of -$5.14 for the current quarter, -$4.85 for the next quarter and -$7.46 for 2021. The lowest estimate earnings-per-share for the quarter is -$6.08 while analysts give the company a high EPS estimate of -$4.56. Comparatively, EPS for the current quarter was $4.27 a year ago. Earnings per share for the fiscal year are expected to increase by 4.50%, and 55.60% over the next financial year.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 18 brokerage firm advisors rate Royal Caribbean Group (RCL) as a “Moderate Buy” at a consensus score of 2.60. Specifically, 6 Wall Street analysts polled rate the stock as a buy, while 10 of the 18 advise that investors “hold,” and 1 rated it as a “Sell.”

Looking at the support for the RCL, a number of firms have released research notes about the stock. SunTrust stated their Hold rating for the stock in a research note on July 14, 2020, with the firm’s price target at $48. Macquarie coverage for the Royal Caribbean Group (RCL) stock in a research note released on July 14, 2020 offered a Neutral rating with a price target of $52. Barclays was of a view on June 24, 2020 that the stock is Equal Weight, while Morgan Stanley gave the stock Underweight rating on June 03, 2020, issuing a price target of $33. Credit Suisse on their part issued Outperform rating on May 21, 2020.


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