Argus raised its price target for Royal Caribbean (NYSE:RCL) to $142 from $95 per share in a note Thursday, reaffirming a Buy rating on the stock.
Analysts at the firm noted factors such as occupancy and potentially strengthening margins as reasons for their bullishness on the stock.
"We think that high cruise occupancy in 3Q23 (110%) points to a demand recovery and is likely to result in stronger-than-anticipated revenue and earnings," said analysts.
"We also look for margins to strengthen and expect new ships to launch over the next 12 months," they added. "RCL shares are trading at 13.5-times our revised EPS estimate for 2024. We believe that this valuation inadequately reflects prospects for a recovery in bookings and improved margins."
Overall, the investment research firm's long-term rating is a Buy for RCL based on its expectations for favorable industry demographics and growth in the Asia/Pacific market.