Unusual Options Trading Activity in Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. (NYSE:RCL - Get Free Report) experienced a significant surge in options trading activity last Thursday. Investors purchased 41,401 call options for the stock, marking an impressive increase of approximately 387% from the daily average of 8,501 call options.

Royal Caribbean Cruises Stock Performance

On Thursday, the stock traded down by $1.84, reaching a price of $238.46, with a total of 420,327 shares exchanged. This volume is notably lower than its usual average of 2,319,946 shares. Royal Caribbean has a market capitalization of $64.12 billion, a price-to-earnings (P/E) ratio of 24.51, a price-to-earnings-growth (PEG) ratio of 0.65, and a beta of 2.60. The company’s liquidity ratios indicate a quick ratio of 0.16, a current ratio of 0.19, and a debt-to-equity ratio of 2.63. Over the past year, the stock has seen a low of $113.10 and a high of $258.70, while its fifty-day moving average stands at $229.48 and the two-hundred-day moving average at $186.93.

Quarterly Earnings Report

Royal Caribbean Cruises released its latest quarterly earnings results on October 29th. The firm reported earnings per share (EPS) of $5.20, surpassing analysts' expectations of $5.05 by $0.15. The company's net profit margin for the quarter was 16.21%, and it achieved a return on equity of 52.92%. Total revenue reported for the period was $4.89 billion, which aligned with analyst forecasts. This figure represents a 17.5% increase when compared to the same quarter from the previous year, where the EPS was $3.85. Analysts project Royal Caribbean Cruises will report an EPS of 11.65 for the current fiscal year.

Dividend Announcement

Recently, the company announced its intention to pay a quarterly dividend, set to be distributed on January 13th to stockholders recorded by December 27th. Each share will receive a dividend of $0.55, translating to an annual dividend of $2.20 and a yield of 0.92%. The company's payout ratio currently sits at 22.61%.

Insider Transactions

In other news, Director Arne Alexander Wilhelmsen sold 230,000 shares on November 19th at an average price of $233.62, totaling $53,732,600. Following this transaction, he retains 18,556,860 shares valued at approximately $4.34 billion. This represents a 1.22% reduction in his holdings. Another director, Richard D. Fain, sold 25,000 shares on October 30th for about $5.25 million. After the sale, he holds around 204,521 shares valued at approximately $42.95 million, indicating a 10.89% decrease in his ownership. Over the past 90 days, corporate insiders have sold 404,332 shares, valued at $94.3 million, while insiders own 7.95% of the company’s stock in total.

Institutional Investor Activity

Institutional investors continue to adjust their positions in Royal Caribbean Cruises. Dimensional Fund Advisors LP increased its holdings by 24.3% in the second quarter, now owning 2,048,501 shares valued at $326.62 million. D1 Capital Partners L.P. raised its position by 3.8% in the last quarter, owning 1,570,262 shares worth $278.50 million. Swiss National Bank raised its stake by 0.5%, holding 725,638 shares worth $128.70 million. Disciplined Growth Investors Inc. MN increased its holdings by 2.3%, adding to their 591,552 shares valued at $104.92 million. Overall, 87.53% of Royal Caribbean’s shares are owned by institutional investors.

Wall Street Analysts’ Ratings

Equities analysts have provided varied ratings on Royal Caribbean Cruises. StockNews.com recently upgraded the stock from “sell” to “hold.” Tigress Financial raised its price target from $210.00 to $270.00, giving the stock a “buy” rating. Wells Fargo & Company increased its target from $180.00 to $232.00 with an “overweight” rating. Similarly, JPMorgan Chase boosted its target from $213.00 to $243.00 and The Goldman Sachs Group raised it from $245.00 to $275.00. Analysts’ consensus on the stock is a “Moderate Buy” with an average target price of $239.75.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a global cruise company. It manages several cruise lines, including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises, offering diverse itineraries. As of February 21, 2024, the company operates 65 ships in its fleet.

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