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Key Takeaways
- Royal Caribbean Cruises was identified as “best in class” among cruise operators by JPMorgan analysts in a research report Tuesday.
- The analysts added Royal Caribbean to its Analysts Focus List.
- JPMorgan noted that Royal Caribbean has said passengers are willing to pay more to travel with the cruise line.
Shares of Royal Caribbean Cruises (RCL) jumped Tuesday after JPMorgan analysts labeled it “best in class” among the cruise lines.
JPM added Royal Caribbean to its Analyst Focus List as a growth stock pick, and raised the outlook for the company’s full-year earnings per share (EPS) to $11.50 from $11.43. It maintained an “overweight” rating on the stock and kept its a $210 price target.
The analysts built their investment thesis for Royal Caribbean on four factors—high net-promoter scores that shows RCL’s popularity among customers, a strong portfolio of destinations, better cost discipline compared to its rivals, and a plan reduce debt through earnings before interest, taxes, depreciation, and amortization (EBITDA) growth and free cash flow generation.
Company Bets on Customers’ Rising Willingness To Pay
The JPMorgan analysts also pointed to comments by the company that travelers’ willingness to pay more for Royal Caribbean cruises continues to increase, so it is continuing to boost prices into 2025 and 2026.
Shares of Royal Caribbean Cruises hit an all-time high last month, and while they’ve declined somewhat since then, they’re still up almost 18% year-to-date. On Tuesday afternoon, they were 9% higher at $152.51.
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