Slashed Guidance Sinks Royal Caribbean Cruises Stock

The majority of analysts are still bullish on RCL

by Lillian Currens

Published on Feb 14, 2020 at 9:52 AM

Royal Caribbean Cruises Ltd (NYSE:RCL) has seen a serious tumble down the charts in recent weeks, as coronavirus headwinds continue to slam the travel sector. In fact, the cruise company commented on the immediate economic implications of the deadly virus last night, announcing that it has cancelled 18 cruises, and lowering its 2020 forecast as a result. This comes right on the heels of eight canceled cruises announced last week. At last check RCL is down 1% to trade at $112.50. 

Coming in to today, RCL had already lost 14.9% for the year, and was off 16% from its Jan. 17 record peak of $135.31, guided lower by its descending 10-day moving average. Now the equity is once again in danger of hitting a brand new two-month low just below the $110 region. 

Analysts have yet to react to today's news, but there could be some downgrades on the horizon, with nine in coverage still calling RCL a "strong buy" while four say "hold." Plus, the consensus 12-month price target of $143.59 is a 26.4% premium to current levels. 

On the other hand, bearish sentiment is pervading the options pits. In the last 10 days, 3.07 puts were picked up for every call at the  International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 87th percentile of its annual range, indicating a much bigger appetite for long puts of late. 


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