Monday, Bernstein research firm maintained its Outperform rating on Royal Caribbean Cruises (NYSE:RCL) shares with a steady price target of $290.00, well above the current analyst consensus range of $155-$310.
According to InvestingPro data, RCL has demonstrated remarkable momentum with an 88% return over the past year. The firm's analysts highlighted the cruise sector as a promising area within the travel industry for 2025, forecasting yield growth to surpass that of hotels.
Royal Caribbean has been identified as a top pick to leverage the ongoing momentum in the cruise industry, according to Bernstein analysts. With a market capitalization of over $60 billion and impressive revenue growth of 22% in the last twelve months, the company's financial metrics support this positive outlook.
The firm's monthly tracking of listed sailing prices across Royal Caribbean's fleet has shown a robust increase in cruise demand, particularly since September. January continued this trend with ticket prices climbing by 5% from December's figures.
The strength in pricing has been particularly notable in the Celebrity brand, suggesting that higher-end cruise formats are outperforming. This has led Bernstein to revise its 2025 yield growth assumption for Royal Caribbean to 4.6%, outpacing competitor Carnival Corporation (LON:CCL)'s forecast of 4.2%. The analysts attribute this to the premium pricing power and the anticipated positive impact of new ship deliveries, including the Star of the Seas and Celebrity Xcel, set to join the fleet in 2025.
The firm anticipates strong yield guidance for 2025 to be announced during Royal Caribbean's fourth-quarter reporting, scheduled for January 28. The cruise line's calendar is filled with potential catalysts such as the WAVE season, a Q1 investor day, the resumption of stock buybacks, and the introduction of new ships and destinations.
Bernstein also notes that Royal Caribbean's valuation appears reasonable, though InvestingPro analysis indicates the stock is currently trading near its Fair Value. For deeper insights into RCL's financial health, valuation metrics, and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, financial services firm Stifel has increased its price target for Royal Caribbean Cruises, citing the company's growth prospects and ability to exceed market expectations. The firm also sees potential in Royal Caribbean's land-based projects, contributing to the company's growth.
Bernstein maintained an Outperform rating on the stock, highlighting the company's significant recovery and cost-efficiency gains post-pandemic. Truist Securities, however, lowered their price target for the company but maintained a Buy rating, recognizing Royal Caribbean's strategic investments aimed at enhancing the cruise experience.
On the other hand, Tigress Financial Partners increased the 12-month price target for Royal Caribbean, citing robust cruise demand driving revenue and cash flow growth. The firm highlighted the company's expansion strategy, which includes the development of land-based resorts and company-owned destinations.
Lastly, Macquarie maintained its Outperform rating on Royal Caribbean and increased the price target, reflecting the company's consistent performance surpassing both guidance and market expectations.
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