Royal Caribbean: Strong Q1 Earnings and Promising Outlook Justify a Buy Rating

Analyst James Hardiman of Citi maintained a Buy rating on Royal Caribbean (RCL – Research Report), boosting the price target to $165.00.

James Hardiman has given his Buy rating due to a combination of factors that highlight Royal Caribbean’s strong performance and promising outlook. In the first quarter of 2024, the company reported earnings that not only surpassed its own guidance but also exceeded analysts’ estimates. The impressive adjusted earnings per share (EPS) and EBITDA results reflect robust pricing dynamics, indicating a surge in demand for cruise travel. Furthermore, Royal Caribbean’s strategic execution and brand strength have been firing on all cylinders, contributing to this positive momentum.
Beyond the solid quarterly outcomes, the company has raised its EPS guidance for the full year of 2024 significantly above previous estimates, suggesting confidence in its future performance. This upward revision is backed by an anticipated year-over-year growth in constant currency net yields, which are expected to outperform both the company’s initial guidance and the consensus estimates. Hardiman’s own adjusted EPS estimate aligns with the high end of Royal Caribbean’s guided range, and he has accordingly raised his price target. This reflects his positive outlook on the stock’s potential for growth, underpinned by the company’s operational excellence and favorable market conditions.

In another report released today, Barclays also maintained a Buy rating on the stock with a $165.00 price target.

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Royal Caribbean (RCL) Company Description:

Royal Caribbean Cruises Ltd. operates as a global cruise vacation company. It operates global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises. The firm also holds interest in TUI Cruises, Pullmantur and SkySea Cruises brands. The company was founded in 1968 and is headquartered in Miami, FL.