Matthew Boss of J.P. Morgan rates Royal Caribbean (RCL) with a Buy due to a multitude of promising factors. He identifies the company as a top-tier operator in the cruise industry, with strong net promoter scores and a competitive portfolio of destinations, including Perfect Day at Cococay. Boss also highlights Royal Caribbean’s superior cost discipline relative to its peers and notes the company’s potential for debt reduction through EBITDA growth and free cash flow generation.
Backing his optimistic outlook, Boss points to the company’s record-setting booking position with no signs of demand slowdown across key itineraries, regions, and customer cohorts. He further explains that Royal Caribbean’s current booking and pricing curve offers benefits such as reduced guidance volatility and the opportunity to pursue higher pricing if demand exceeds supply. Additionally, the innovative pricing strategies, including AI-driven decisions and sophisticated yield management, are expected to drive prices up in the latter half of the year. These elements contribute to his positive stance and the Overweight rating for RCL, with a price target based on a valuation that remains slightly conservative due to broader market uncertainties.
Boss covers the Consumer Cyclical sector, focusing on stocks such as Boot Barn, Nike, and Royal Caribbean. According to TipRanks, Boss has an average return of 1.9% and a 50.91% success rate on recommended stocks.
In another report released on February 2, Stifel Nicolaus also assigned a Buy rating to the stock with a $170.00 price target.
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Royal Caribbean (RCL) Company Description:
Royal Caribbean Cruises Ltd. operates as a global cruise vacation company. It operates global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises. The firm also holds interest in TUI Cruises, Pullmantur and SkySea Cruises brands. The company was founded in 1968 and is headquartered in Miami, FL.
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