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Why Royal Caribbean Stock Jumped 7.5% Today

By Howard Smith – Aug 5, 2021 at 5:15PM

Key Points

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The reopening trade is back on today.

What happened

Cruise-operator Royal Caribbean (RCL -2.31%) released its second-quarter financial report yesterday, and investors reacted by continuing a trend that the stock has experienced for about a week -- ending the day lower. But shares rebounded today, with a bounce of 7.5% as the market closed.

So what

Recent reopening pessimism related to the quickly spreading COVID-19 delta variant has shifted some investor sentiment away from reopening names that had been recovering. But travel stocks, including airlines and cruise operators, bounced back today as renewed urgency due to rising case numbers has increased the vaccination rate in the U.S.

The Centers for Disease Control and Prevention (CDC) data shows the vaccination rate -- based on the seven-day average of daily reported first doses -- has more than doubled since the start of July in some states that have trailed the national average rate, as reported by CNBC. The states of Alabama, Mississippi, Louisiana, and Arkansas are in that category.

A cruise ship in the ocean.

Image source: Getty Images.

Now what

In yesterday's quarterly report, Royal Caribbean said in a statement, "The resumption of service is being implemented at a very fast pace." Globally, the company said it's already operating at 42% of its capacity. It added that it expects to be running at 60% capacity by the end of July and 80% by the end of the year. 

That's good news for investors, and they seem to be rewarding the stock a day after the report. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Royal Caribbean Cruises Stock Quote
Royal Caribbean Cruises
RCL
$58.05 (-2.31%) $-1.37

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