With Royal Caribbean's third-quarter earnings call coming up this week, is the stock a buy? Royal Caribbean, which goes by the ticker symbol "RCL" on the NYSE, has undoubtedly had struggles since the onset of the COVID-19 pandemic. Although the CDC's no-sail order didn't help the company, the stock may still hold its own in the long term.
What to expect from Royal Caribbean's Q3 earnings
Royal Caribbean has already instituted various financial transactions, including new common shares and convertible notes, to help it manage squashed revenue during 2020. The company will likely report its third-quarter earnings on Oct. 29.
Market analysts expect lower numbers in the earnings report. The quarterly consensus suggests that the EPS could be in the red by as much as -$4.92 or as little as -$4.56. Both of these numbers are below the company's EPS of $4.27 in the third quarter of 2019. However, the numbers are an improvement from the second quarter of 2020, when the company saw an EPS of -$6.13.
Royal Caribbean Cruise's stock price today
Royal Caribbean opened at $58.08 per share on Tuesday, Oct. 27. Like most of the U.S. market, the stock saw a steep decline after the market close on Oct. 23 when it dropped by 12.70 percent. Royal Caribbean stock had a 17.25 percent dip earlier in October.
Since the beginning of the year, Royal Caribbean has dropped by 56.55 percent. The stock has recovered partially from its lowest point on March 19.
The no-sail order impacted Royal Caribbean, but it isn't the only cruise line feeling the heat. Carnival Corporation and Norwegian Cruise Line have challenges of their own.
Carnival Corporation's stock price
Carnival Corporation ("CCL" on the NYSE) opened on Oct. 27 at $14.02 per share. In line with Royal Caribbean, Carnival fell by 9.69 percent after the market close on Oct. 23. The stock also fell by 12.26 percent in the first half of October. So far, Carnival has fallen by 72.75 percent YTD.
Norwegian Cruise Line's stock price
Norwegian Cruise Line ("NCLH" on the NYSE) opened the market on Oct. 27 at $16.86 per share. The stock fell by 10.48 percent after the close on Oct. 23. The company's stock fell by more than 14 percent earlier in October. Norwegian Cruise Line stock is down 72.30 percent YTD.
Carnival and Norwegian Cruise Line have increased marginally since their March lows.
What to expect from Royal Caribbean stock
With Royal Caribbean's third-quarter earnings call coming up in just a few days, analysts expect the numbers to improve compared to the company's second-quarter standing. An improvement could be a plus for the publicly traded capital. Since the capital is so low right now, the next 12 months could see a marked increase of up to 36.3 percent by some estimates. Royal Caribbean's revival could be a long journey, but a long-term hold could mean significant returns for investors who get on board now.
Investors probably shouldn't hold their breath in the short term—especially with ongoing no-sail orders. However, Royal Caribbean could make waves when it starts sailing again.