Truist Securities Increases Price Target for Royal Caribbean Cruises by 15.9%

Truist Securities's Patrick Scholes raised their price target on Royal Caribbean Cruises (NYSE: RCL) by 15.9% from $151 to $175 on 2024/05/29. The analyst maintained their Strong Buy rating on the stock.

According to Scholes, the decision to increase the price target was based on recent conversations with senior travel reservation industry executives and extensive analysis of big data related to future cruise bookings and pricing. The findings of these discussions and analysis suggest that the overall booking and pricing trends for Royal Caribbean Cruises continue to appear promising.

Scholes highlighted the potential for earnings upside in 2024, particularly through elevated pricing on near-in bookings due to limited inventory remaining for the year. The analyst also emphasized that Royal Caribbean Cruises is the industry leader, thanks to its highly acclaimed new ships and its introduction of onboard amenities such as CocoCay and newly developed private beaches.

The first-quarter financial results for Royal Caribbean Cruises further support Scholes's positive outlook. The company reported earnings per share (EPS) of $1.77, surpassing both the Zacks Consensus Estimate of $1.33 and the EPS of $(0.23) from the same period in 2023. Additionally, revenue for Q1 2024 reached $3.7 billion, exceeding the Zacks Consensus Estimate of $3.6 billion and representing a substantial 27.6% increase compared to Q1 2023.

Looking ahead, Royal Caribbean Cruises' management has provided guidance for the second quarter and full year of 2024. For Q2 2024, the company anticipates EPS in the range of $2.65 to $2.75, while the current Zacks Consensus Estimate stands at $2.38. As for the full fiscal year, Royal Caribbean Cruises expects EPS between $10.70 and $10.90, up from the previous range of $9.50 to $9.70. The current Zacks Consensus Estimate for FY 2024 is $10.06.

In response to the positive outlook and strong financial performance, Royal Caribbean Cruises' President and CEO, Jason Liberty, expressed confidence in the company's future prospects. Liberty stated, "Demand for our leading brands and the experiences they deliver continues to be very robust, resulting in outperformance in Q1, a further increase of full-year earnings guidance, and 60% expected earnings growth year over year." He also highlighted the company's goal of achieving all their Trifecta financial goals in 2024, which will enable them to focus on long-term growth and greater market share in the global vacation market.

Furthermore, analyst John Staszak from Argus Research also provided an update on Royal Caribbean Cruises on May 29, 2024. Staszak raised the price target by 6.8%, from $161 to $172, and maintained a Strong Buy rating on the stock.

According to available data, 100% of top-rated analysts currently rate Royal Caribbean Cruises as either a Strong Buy or Buy. No analysts consider it a Hold, and none recommend or strongly recommend selling the stock.

In terms of performance, Royal Caribbean Cruises' stock has shown remarkable growth, increasing by 84.4% year-over-year. During the same period, the stock has outpaced the S&P 500, which has risen by 25.2%.

Truist Securities analyst Patrick Scholes, who raised the price target and maintained the Strong Buy rating, is recognized by WallStreetZen as being in the top 4% out of 4,593 Wall Street analysts. Scholes specializes in various sectors, including Technology and Real Estate.

Royal Caribbean Cruises Ltd., headquartered in Miami, FL, operates three major cruise lines: Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. With a fleet of 61 ships, the company has been a major player in the cruise industry since its establishment in 1968.

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