Bank of America upgrades Royal Caribbean, keeps $330 target
The bank cited resilient travel and cruise spending, yield expectations and potential benefits from the cruise company’s reported Sandals investment.
Bank of America upgraded Royal Caribbean from neutral to buy while maintaining a $330 price target, which represented nearly 36% upside from the shares’ Friday close. The upgrade followed a 26% decline from the stock’s Aug. 5 closing peak, despite continued strength in travel spending and cruise bookings.
Bank of America analyst Andrew Didora said travel spending had increased at a mid- to high-single-digit rate since February. Cruise spending, he said, accelerated to growth in the mid-teens during July and August.
Didora said those trends supported the bank’s expectation for Royal Caribbean to achieve at least 4% net yield growth in the fourth quarter of 2026. He also saw potential for the company to provide 2027 guidance consistent with its historical net yield range of 2% to 3%.
The company is also taking a 50% equity stake in Caribbean resort chain Sandals, according to the report. Didora estimated that combining Sandals with Royal Caribbean’s operating expertise could increase the cruise operator’s EBITDA by a low- to mid-teens percentage.
Separately, another analyst characterized Royal Caribbean as a high-quality business, citing returns on invested capital in the high teens, EBITDA margins near 40% and an investment-grade balance sheet.
