This post was originally published on this site
The company incurred massive losses last year due to pandemic-related travel restrictions. But recently announced positive data from Pfizer Inc. (NYSE:PFE) for its COVID-19 oral antiviral treatment candidate, which was found to reduce the risk of hospitalization or death by 89%, buoyed investors’ optimism about the recovery of the cruise industry. RCL shares advanced following the news release. Furthermore, if the breakthrough drug does reduce fatalities, the demand for travel should rebound and enable cruise line companies, including RCL, to reverse their fortunes.
The company expects to generate positive cash flow by spring and be profitable for the entire year of 2022. However, operational challenges persist, and the demand rebound is uncertain because the possibility of new variants of the virus emerging cannot be ruled out. Also, the commercialization of the Pfizer drug is expected to take a while. Also, RCL looks significantly overvalued at its current price level, considering its underlying fundamentals and, with a 2.62 beta, the stock seems to be highly volatile.
