Travel leader Royal Caribbean, Tuesday's pick for IBD 50 Growth Stocks To Watch, is within cruising distance of a buy point, as the company returns to big profitability this year. That makes RCL one of the best stocks to watch in today's market.
Royal Caribbean operates 63 cruise ships with an additional 10 ships on order as of June 30. The cruise line travels to more than 1,000 destinations.
Its brands include Royal Caribbean International, Celebrity Cruises and Silversea Cruises. The company also has a 50% stake in two German cruise lines.
The company announced its Icon of the Seas ship on June 22. The new vessel is set for its maiden voyage in January, and will travel to Caribbean locations. Royal announced on June 29 that it reopened bookings to China and the Far East for sailings starting in April 2024.
Royal Caribbean Profits Swell
Cruise lines have posted powerful gains through 2023 as consumers cut loose to spend on vacations delayed by pandemic lockdowns. On Oct. 26, Royal Caribbean said adjusted earnings leapt to $3.85 per share compared with a gain of just 26 cents per share last year. Revenue spiked 39% to $4.16 billion.
Analysts project the company will return to profitability this year, earning $6.55 cents per share, with growth of 37% seen in 2024, according to FactSet.
Because the company lost money the past three years, RCL stock has an Earnings Per Share Rating of 83 out of a best-possible 99, according to IBD Stock Checkup. This rating takes into account earnings growth and profit stability over the past three years. The two most recent quarters are weighted more heavily.
RCL stock has a 90 out of a best-possible 99 IBD Composite Rating after a tremendous stock price move since July 2022. That makes it one of the best stocks to watch.
Other travel stocks to watch include Monday's IBD Stock Of The Day Booking Holdings. BKNG stock is nearing a handle buy point at 3,207.32.
Learn How To Time The Market With IBD's ETF Market Strategy
Royal Caribbean Stock Nears Buy Point
Royal Caribbean stock is forming a cup-with-handle base with a buy point of 107.76, according to IBD MarketSmith chart analysis. RCL stock dropped 0.2% midday Tuesday, trading about 1% away from its newest buy point.
A key technical metric to watch is the relative strength line. RCL stock's RS line is nearing a new high, which is a bullish sign of market outperformance. When the stock breaks out, the RS line should hit a new high to confirm the stock as a market leader.
With the stock market outlook in a confirmed uptrend, investors have the opportunity to raise market exposure through buying stocks making strong breakouts.
Best Stocks To Buy And Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| ImmunoGen | 20.69 | Cup base | |
| Lululemon Athletica | 406.94 | Flat base | |
| Microsoft | 366.78 | Cup base |
Source: IBD Data As Of Nov. 28, 2023
Follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
