Royal Caribbean invests $3 billion for half of Sandals Resorts
BofA Securities expects an initial EBITDA contribution and has upgraded Royal Caribbean from neutral to buy.
Royal Caribbean is investing $3 billion for a 50% stake in Sandals Resorts. BofA Securities analysts expect the deal to initially add between 3% and 4% to Royal Caribbean’s EBITDA.
The analysts also outlined a longer-term estimate for the venture. If it proves successful, they said it could deliver low- to mid-teens EBITDA growth through 2030. Their estimate would put Sandals’ EBITDA at approximately $900 million, compared with about $600 million currently.
BofA upgraded Royal Caribbean’s rating from neutral to buy while keeping its price target at $330. The firm’s projections for Sandals and Royal Caribbean reflect analyst estimates rather than reported results. The forecast for growth through 2030 is specifically conditional on the venture succeeding, while the expected initial addition to Royal Caribbean’s EBITDA is also an analyst assessment of the deal’s potential financial effect.
