Despite the tough year it’s been for cruise lines, shares of Royal Caribbean (NYSE:RCL) are up more than 75% over the past six months. The stock’s seen some bullishness as investors have been investing in the cruise company even as Royal Caribbean is suspending sailings and operating nowhere near capacity. And a second wave of COVID-19 threatens its future.
On its website, Royal Caribbean says it hopes to resume its operations by December 1 (although sailings in Australia are delayed until the end of the year). However, that might be a bit optimistic given that COVID-19 is still a concern and not going away anytime soon. As the number of cases continues to rise around the world, it’s possible that Royal Caribbean delays its operations for even longer.
However, on its second quarter earnings call, the company’s CEO Richard Fain said he was “humbled and surprised” by the number of bookings its customers have been making for next year, and it’s clear that “our guests want to come back.” But that optimism may not be enough for investors given that in Q2, the company’s sales of $175.6 million were down an incredible 94% from the prior-year period.
While Royal Caribbean’s staying afloat for now, the stock’s still down more than 45% year to date. And unless there’s a big, positive surprise for Q3, when the company releases its results in the coming weeks, the stock could be headed down again.
It’s encouraging that the company’s seeing many bookings for next year, but now may not be the time for investors to take a chance on this stock. If you’re looking to buy Royal Caribbean stock, you may be better off waiting until later in the year when there’s a bit more certainty about its operations.