BofA upgrades Royal Caribbean Group to buy
The bank cited resilient travel spending and the cruise operator’s financial profile while acknowledging continued macroeconomic risk.
BofA raised its rating on Royal Caribbean Group from neutral to buy, saying travel spending remains strong despite risks in the broader economic environment.
Analysts Andrew G. Didora and John Gellene characterized Royal Caribbean as a high-quality business. In their assessment, the company generates a return on invested capital in the high teens, has EBITDA margins approaching 40% and maintains an investment-grade balance sheet.
The analysts also noted that Royal Caribbean has hedged more than half of its expected 2027 fuel needs and recently announced an investment in Sandals Resorts. They said the cruise company is positioned to capture additional market share.
Separately, analysts surveyed by FactSet assign Royal Caribbean an average overweight rating and a mean price target of $351.
