Royal Caribbean Stock: Smooth Sailing Ahead Despite Macroeconomic, Debt Fears

Summary

• Investors need to look beyond RCL's huge debt and the headwinds presented by inflation and possible recession.
• RCL can now meet its operating and capital costs using cash generated from operations and will, according to analysts' revenue estimates, recover beyond pre-pandemic levels by end of 2023.
• RCL expects to end the year with load factors above 100% and is not in need of any further external capital to stay afloat, signaling strong business turnaround.
• Compared with peers CCL and NCLH, RCL has shielded its shareholders by avoiding dilutive financing during the pandemic.
• The stock is still down more than 50% YTD and building a position now before the stock catches up with the improving underlying business looks like the smart move.

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Royal Caribbean Cruises Ltd. (NYSE:RCL) could surpass its 2019 pre-pandemic annual revenue performance in 2023, according to Wall Street analysts. The consensus revenue estimate among 14 analysts covering the stock is $12.56 billion for

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RCL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.