Royal Caribbean is in a better financial position than sector peers
The shares of Royal Caribbean Cruises Ltd (NYSE:RCL) are up 7.4% to trade at $43.66 today, after receiving a price-target hike to $52 from $48 from Stifel, and an initiation of coverage at Credit Suisse of "outperform" alongside a $67 price target. While its sector peers continue to struggle thanks to coronavirus-related lockdown measures, Wedbush analyst James Hardiman speculates RCL is in a better position financially. However, Royal Caribbean Stock is still facing a 67.2% year-to-date deficit.
Given the current economic climate surrounding the cruise sector, it's no surprise that RCL has suffered on the charts. Despite this, the equity has recently found support at the 60-day moving average. Save for the beginning of January, the trendline remained well overhead; however, RCL has managed to close above it twice in the past week, and is on pace to do so again today.
All of this action has the majority of analysts piling onto Royal Caribbean stock optimistically. Of the 12 in coverage, seven sport a "strong buy." Conversely, four rate RCL a lukewarm "hold," and just one chimed in with a "sell." Meanwhile, the consensus 12-month price target of $63.93 is a whopping 46.1% premium to current levels. If that premium keeps rising, it could signal some price-target cuts in the near future.
More optimism is being unwound as Royal Caribbean's options pits are jumping with activity. Over 35,000 calls have changed hands today, nearly double the average intraday amount. One of the most popular contracts looks to be the May 45 call, where new positions are being opened.
Lastly, options traders should look toward RCL's attractively priced premium, which, according to Schaeffer's Volatility Index (SVI) of 95%, sits in the 25th percentile of its annual range. However, it's worth noting that the equity has been more volatile than expected during the past 12 months. This is based on its Schaeffer's Volatility Scorecard (SVS) of 82 (out of 100).