BMO Starts Cruise Coverage With Royal Caribbean as Top Pick
The firm gave Royal Caribbean an Outperform rating while assigning Market Perform ratings to Norwegian Cruise Line Holdings and Carnival Corp.
BMO Capital initiated coverage of three major cruise operators, naming Royal Caribbean Group its top choice. The firm described cruising as a cost-effective option for travelers and a profitable business for operators, particularly those that hedge fuel costs and expand related revenue streams.
BMO set a $370 price target for Royal Caribbean, representing 31% upside from the stock's last closing price. The firm cited the company's ability to retain existing guests while attracting first-time passengers. Royal Caribbean shares had gained 1% for the year.
Norwegian received a $21 price target. BMO analyst Tristan Thomas-Martin said its hurdles included financial and operating performance that trailed key rivals, activist investor involvement and a challenging business environment. Norwegian shares had fallen 15% for the year.
BMO assigned Carnival a $30 price target and said it saw few immediate catalysts beyond positive industry demand. Carnival reported second-quarter revenue of $6.6 billion and earnings of $0.41 per share, both above Street estimates. Its shares had declined 12% for the year.
