Options Trade of the Week
Royal Caribbean Cruises Ltd (NYSE:RCL)
Sunday, January 25, 2015
**Royal Caribbean Set To Cruise Higher!**
Royal Caribbean Cruises Ltd (NYSE: RCL), a cruise company which operates 41 ships in the cruise vacation industry across six brands with an aggregate capacity of approximately 98,650 berths worldwide, is scheduled to release its fourth-quarter numbers before the market opens on January 26. The company is expected to report earnings of $0.44 per share, up from $0.23 during the same period last year. The stock has risen 1.9% on the year.
RCL is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts are
bullish on the travel and tourism industry in general, and in that industry Royal Caribbean appears poised to really reward investors, therefore many are raising their estimates right before earnings – which is a pretty good indicator of some favorable trends underneath the surface for RCL in this report. In fact, over the past month, current quarter estimates have risen from 40 cents per share to 41 cents per share, while current year estimates have risen from $3.46 per share to $3.48 per share.
Not only will falling oil prices help reduce the company's total overhead, but improvements in the U.S. economy, as well as rising consumer confidence should lead to higher passenger numbers. If the company hits its earnings estimate, it would represent earnings growth of 91 percent year over year. The strong forecast is a major reason why Wall Street has pushed the stock to an all-time high, which it is currently trading just 0.9% below.
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