Royal Caribbean shares rise after $3 billion Sandals-related deal
The cruise company agreed to acquire a 50% stake in the business behind Sandals resorts, while analysts highlighted potential earnings growth and added debt.
Royal Caribbean agreed to pay about $3 billion for a 50% interest in the company behind Sandals resorts. Royal Caribbean Cruises shares climbed about 25% in the two weeks following the announcement, trading near $280, although they remained roughly unchanged for the year.
Jefferies upgraded the stock to Buy and estimated the venture could contribute approximately $159 million to 2027 earnings, equivalent to about 59 cents per share. Barclays reiterated an Overweight rating and set a $337 price target, while Citigroup reaffirmed its Buy rating the previous week.
Royal Caribbean management described demand for 2027 as very strong, with bookings at elevated levels. The company also said it has greater ability to increase prices for last-minute reservations rather than discount fares to fill cabins.
The acquisition will be financed with borrowed funds. The specific borrowing terms had not been disclosed, leaving the resulting interest costs unclear.
