Deutsche Bank upgrades Royal Caribbean after share decline
Analyst Chris Woronka maintained a $299 price target, implying 23% upside from the Sept. 25 closing price.
Deutsche Bank upgraded Royal Caribbean to Buy from Hold, saying the cruise operator’s recent share-price slump offered an attractive entry point. Woronka retained a $299 price target, representing 23% upside from Royal Caribbean’s Sept. 25 close of $242.70.
Woronka said the shares had declined 26% since Aug. 5 while the SPX was flat, creating a more favorable risk-reward profile. He attributed the drop to rising oil prices and concerns about continued growth in cruise pricing. He also noted that Norwegian Cruise Line was seeking to fill more of its 2027 cabins early as Caribbean capacity was expected to increase by double digits in the fourth quarter.
Woronka said fuel costs had risen since war began in the Middle East but accounted for about 7% of revenue at current prices. Royal Caribbean also said it would invest $3 billion in a joint venture that would own 50% of Sandals Resorts.
Separately, Deutsche Bank expected Carnival to modestly exceed forecasts and potentially trim its fourth-quarter pricing outlook, a development the bank said the market already largely anticipated.
