Royal Caribbean enters the final stretch before its July 28 earnings with a striking disconnect: the stock has surged 21% over the past month, yet options traders just registered their most defensive positioning of the past twelve months.
The options market tells the clearest story this week. The put/call ratio jumped to 1.96 on Tuesday — the highest reading in the past year and more than four standard deviations above its 20-day average of 1.25. That is not a modest lean toward caution; it is an unusually sharp one-day spike in demand for downside protection. The prior three weeks showed a PCR hugging close to 1.18-1.25, making Tuesday's reading a genuine outlier. Whether this reflects hedging against a stock trading near all-time highs or a tactical bet ahead of July's print, the magnitude of the move is notable.
Short interest, by contrast, tells a less charged story. Bears have been paring positions. SI as a percentage of the free float has dropped from roughly 5.0% in mid-June to 4.6% now — a decline of about 7% on the week. The borrow market offers no pressure: cost to borrow runs at just 0.51%, down modestly on the week, and availability is wide at roughly 870% of current short interest, meaning there is ample room for new shorts to establish positions without constraint. The lending market is loose, not squeezed.
Analyst activity has been broadly constructive lately. Wells Fargo nudged its target to $361 this week while keeping Overweight, and Citigroup raised to $362 last week — both moves flagging continued confidence in the near-term set-up. The Street consensus mean target is $337, sitting above the current $309.53 price but not dramatically so. Morgan Stanley stands as the notable dissenter, having trimmed to $280 at Equal-Weight in late May — a call that has aged poorly given the subsequent rally. The consensus rating is formally "hold," reflecting a split between the Buy-heavy majority and a handful of cautious sideline voices. On valuation, the PE multiple has expanded nearly three turns over the past month to 16.8x, and price-to-book has moved up by more than one turn to 6.4x — reflecting the pace of the re-rating, not cheap territory.
Institutional ownership shows one development worth watching. Awilhelmsen AS, the Norwegian holding company and a long-standing strategic holder, trimmed its position by roughly 4 million shares in late May to 12.4 million. That is a material reduction from a concentrated, non-passive holder. Capital Research and Management remains the dominant voice with 27.8% of shares, and BlackRock has added modestly. The insider picture is quiet — a cluster of director sells on May 28 totalling negligible size, all at uniform prices, typical of routine equity compensation events.
Royal Caribbean's last two quarterly earnings prints produced meaningful moves: the most recent April 30 result drove a 4.5% gain on the day and 10.6% over the following five sessions, while the January 2026 print saw a 3.4% drop on the day. With the stock up 21% in a single month heading into July 28, and options traders pricing in more uncertainty than at any point this year, the question over the coming weeks is whether that re-rating holds through the print or whether the defensive hedging now visible in the PCR proves prescient.
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