Bank of America upgrades Royal Caribbean to Buy
Analyst Andrew Didora maintained a $330 price target, citing resilient cruise spending and expectations for fourth-quarter yield growth.
Bank of America analyst Andrew Didora upgraded Royal Caribbean Cruises Ltd. from Neutral to Buy while retaining a $330 price target. The change followed a decline of nearly 26% in the cruise company’s shares since the end of July, when they traded around the bank’s current target.
Didora attributed the pullback to higher fuel costs, investor concerns about additional Caribbean cruise capacity and pressure from the broader economy. Bank of America card data nevertheless showed cruise spending among its customers increased 17% year over year in July and 14.1% in August.
Management commentary at a recent Bank of America conference also gave the bank confidence that Royal Caribbean could achieve at least 4% net yield growth in the fourth quarter, according to Didora. The report described that expected pace as the strongest in the industry.
The report said Royal Caribbean had hedged more than half of its projected 2027 fuel needs, reducing its exposure to a potential oil-price increase. It also projected that competing Caribbean cruise capacity would rise by a high-single-digit percentage in 2027, which could put pressure on pricing. Royal Caribbean shares were up 0.08% at $242.91 at the stated publication time Monday.
