Royal Caribbean hits 52-week high following 11% surge last week
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Royal Caribbean hits 52-week high following 11% surge last week

The world’s second largest cruise line, Royal Caribbean, hit a 52-week high last Thursday, after strong quarterly results sent its share price up by a massive 11.2%. So potent were these results that rivals Carnival and Norwegian Cruise Line were bolstered too – by 5.6% and 7.6%, respectively – lifting the industry higher.

RCL’s incredible surge at the end of the month

SOURCE: Yahoo Finance

Royal Caribbean brought home impressive earnings – 28% higher than the previous year – for the quarter, extending its double-digit earnings streak to four years. A big part of that was bottom line wins: the company is more efficient now and the industry witnessed a decline in net cruise costs outside of fuel last year.

At the same time, demand for cruises generally – and for Royal Caribbean particularly – has remained high. As the enormous Chinese market becomes more actualized, this may be a trend that continues: there are estimated to be more potential cruise passengers in China than in the rest of the world combined.

But it wasn’t industry wide considerations that really pushed Royal Caribbean over the top of its peers: it was a positive blueprint for the next twelve months.

Bookings are already beating last year’s record high, and the cruises that are being booked are doing so at higher rates. Taken together with the industry’s aforementioned strength (which extends throughout Europe and North America, as well as China and Australia), Royal Caribbean sees net yields advancing in 2017. The company has forecast a rise in net yields of 4.5% to 5% for this quarter, and 4% to 4.5% for the year as whole.

Dominion holds Royal Caribbean in its Global Trends Luxury Fund.

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