Investors rushed into Royal Caribbean (RCL) last Friday after Iran declared the Strait of Hormuz open to all commercial vessels for the duration of the ceasefire.
As the announcement crashed oil prices, RCL ripped through its 20-day moving average (MA), signaling that the bulls are beginning to take back control, at least in the near term.
Despite the recent surge, Royal Caribbean stock remains down roughly 18% versus its year-to-date high.
Significance of Oil Prices for Royal Caribbean Stock
RCL shares rallied on Iran’s declaration, as fuel is among the largest operating expenses for cruise lines.
The reopening of a waterway responsible for 20% of the world’s oil transit removed both a supply bottleneck and a geopolitical risk premium that had hurt the sector since the Iran war began in late February.
Adding to momentum is Royal Caribbean’s attractive valuation. It’s trading at about 15x earnings with analysts projecting nearly 17% annualized long-term earnings growth, reinforcing that it isn’t expensive relative to its growth trajectory.
A healthy 2.1% dividend yield makes RCL even more compelling for income-focused investors in 2026.
RCL Shares’ Current Rally Still Faces Risks
On the flip side, the optimism embedded in Friday’s rally faces immediate and serious risks.
The ceasefire underpinning the Strait’s reopening was set to expire on April 21, and by Saturday, reports emerged that Iranian gunboats had fired on a tanker attempting to pass through the strait.
Iran’s military reinstated restrictions, citing repeated breaches of trust by the United States, and the probability of oil crossing $100 a barrel again jumped to 44%.
The U.S. naval blockade of Iranian ports also remains in full force, suggesting that even during the brief period the strait was open, conditions were far from normal.
Where Barchart Data Suggests Royal Caribbean Is Headed
According to Barchart’s options data, the put-to-call ratio on contracts expiring mid-July sits at 0.81x currently, indicating a slight bullish skew.
The upper price on those contracts is about $332, signaling potential for 17% upside over the next three months. However, the lower price of $238 suggests significant downside potential as well, should the geopolitical tensions persist.
Investors should exercise caution in playing Royal Caribbean shares also because they continue to trade below their long-term MAs (100-day and 200-day), reinforcing that the broader downtrend remains intact.
How Wall Street Recommends Playing Royal Caribbean
Despite the aforementioned technical and macro risks, Wall Street firms remain bullish on RCL stock for the remainder of 2026.
The consensus rating on Royal Caribbean remains at “Moderate Buy,” with the mean price target of about $350 indicating potential upside of about 27% from here.
This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/Microsoft%20Corporation%20logo%20on%20sign-by%20Jean-Luc%20Ichard%20via%20iStock.jpg)
/Quantum%20Computing/A%20concept%20image%20showing%20a%20ray%20of%20light%20passing%20through%20cyberspace_%20Image%20by%20metamorworks%20via%20Shutterstock_.jpg)
/Netflix%20on%20tv%20with%20remote%20by%20freestocks%20via%20Unsplash.jpg)