What Happened?
Shares of cruise vacation company Royal Caribbean (NYSE: RCL) jumped 6.8% in the afternoon session after the company announced a new $2 billion share repurchase program and declared a quarterly dividend of $1.00 per share.
The authorization followed the completion of a previous $1 billion buyback program. Since July 2024, the company had returned $1.9 billion to shareholders through dividends and share repurchases. Adding to the positive sentiment, Bank of America data indicated that consumer spending on cruising rose 11.2% year-over-year in November, even as overall travel spending fell. Broader economic news also provided a tailwind, as the Federal Reserve cut interest rates. This move helped lower borrowing costs for the company and typically bolstered consumer discretionary spending, supporting the outlook for leisure travel. Other cruise lines, including Carnival and Norwegian Cruise Line, also traded higher, suggesting broad strength across the sector.
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What Is The Market Telling Us
Royal Caribbean’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 1.8% on the news that reports of operational disruptions following dense winter fog in Florida delayed three of its cruise ships.
The heavy fog enveloped Tampa Bay, which forced the closure of the port. This situation delayed the docking of three of the company's ships—Rhapsody of the Seas, Enchantment of the Seas, and Grandeur of the Seas—by at least eight hours. The disruption impacted both the sailings that were ending and the new voyages scheduled to begin. The stock's decline also happened as the broader cruise sector experienced a sell-off, with major cruise line stocks sliding significantly since late September.
Royal Caribbean is up 21.7% since the beginning of the year, but at $278.62 per share, it is still trading 23.8% below its 52-week high of $365.84 from August 2025. Investors who bought $1,000 worth of Royal Caribbean’s shares 5 years ago would now be looking at an investment worth $3,644.
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