RCL 8-K Dated 2/22/21

[NavArch64]

From Balance Sheet of 12/31/20

Shareholder Equity = $33.03 / share

Long Term Debt / Shareholder Equity = 2.05

[Ken at the beach]

1 hour ago, NavArch64 said:

From Balance Sheet of 12/31/20

Shareholder Equity = $33.03 / share

Long Term Debt / Shareholder Equity = 2.05

and yet the stock is up big today and trading at over $87

[NavArch64]

From Income Statement Year Ending 12/31/20

Income Earnings per Share (Loss) = ($27.05) / share

If 2021 Earnings per Share (Loss) = ($27.05) / share

Then Projected Shareholder Equity on 12/31/21 = $33.03 - $27.05 = $5.98 / share

[NavArch64]

As far as a Market Price of $87 / share for RCL is concerned, investors willing to pay that price generally expect others to be willing to pay greater than that at some point in time. If RCL recovers dramatically, that may be a reasonable assumption. If RCL struggles to recover, that may turn out to not be such a good assumption. In the near term,  RCL itself predicts a loss in 2021 and makes no predictions for 2022 and beyond.

[smokeybandit]

I would think 2021 would be a success if they can get half their fleet sailing by the end of the year, even if financially it's still a loss.

[NavArch64]

I agree with smokeybandit. I would guess that a reasonable recovery scenario might be a big loss in 2021, a smaller loss in 2022 and breakeven in 2023. From there, maybe a $5.00 / share income target by 2025. RCL earned $8.95 / share in pre-pandemic 2019, so with the cost of new protocols and a higher debt/equity ratio in the corporate capital structure, $5.00 / share income could be achievable. If one uses a a nominal price / earnings multiple of 10, this would give a $50 price target for the stock. The current share price trading in the market today of $87 appears to be on the high side. Perhaps there are a number of speculators in the market.

[notmyrealnameoremail]

39 minutes ago, NavArch64 said:

I agree with smokeybandit. I would guess that a reasonable recovery scenario might be a big loss in 2021, a smaller loss in 2022 and breakeven in 2023. From there, maybe a $5.00 / share income target by 2025. RCL earned $8.95 / share in pre-pandemic 2019, so with the cost of new protocols and a higher debt/equity ratio in the corporate capital structure, $5.00 / share income could be achievable. If one uses a a nominal price / earnings multiple of 10, this would give a $50 price target for the stock. The current share price trading in the market today of $87 appears to be on the high side. Perhaps there are a number of speculators in the market.

FWIW, pre-covid, Royal's P/E was between 14.5 and 21 for several years. 

 

While I expect that as mentioned on the call there will be restart costs, dropping less profitable, smaller ships and bringing on new large ships should have a nice positive impact on earnings as time goes on.