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Investing.com - Mizuho has reduced its price target on Royal Caribbean Cruises (NYSE:RCL) to $362.00 from $372.00 while maintaining an Outperform rating on the stock. The cruise operator, currently valued at $81.57 billion, has demonstrated strong financial health with a perfect Piotroski Score of 9, according to InvestingPro data.
The price target adjustment comes as Royal Caribbean shares have declined 14% over the past three months, significantly underperforming competitors Carnival Corporation (NYSE:CCL) and Norwegian Cruise Line Holdings (NYSE:NCLH), which fell 3.7% and 2.7% respectively during the same period.
Mizuho noted that investor sentiment toward Royal Caribbean has become more conservative following Carnival’s financial outlook, which revealed unexpected cost increases for fiscal year 2026 that were approximately 100 basis points higher than market expectations.
The research firm specifically highlighted concerns about potential cost impacts from Royal Caribbean’s three ongoing development projects, drawing parallels to Carnival’s 50 basis point cost headwind from its Celebration Key project.
Despite these concerns, Mizuho maintained its Outperform rating, noting that Royal Caribbean currently trades at 12.8 times forward EBITDA, representing a 5x premium compared to its competitors Carnival and Norwegian Cruise Line.
In other recent news, Royal Caribbean Cruises Ltd. has completed a $1.5 billion offering of senior unsecured notes with a 5.375% interest rate due in 2036. The company intends to use the proceeds to finance the delivery of the Celebrity Xcel and to manage its existing debt obligations. These funds will replace the need to use the existing committed export credit agency facility. Additionally, Royal Caribbean has secured long-term shipbuilding rights at the Meyer Turku shipyard in Finland through 2036. This agreement includes an order for the Icon 5 ship, expected to be delivered in 2028, with options for additional vessels. The cruise operator’s financial strategy involves redeeming, refinancing, or repurchasing existing debt, including revolving credit facilities. The notes were issued under an existing indenture and were managed by BofA Securities, Goldman Sachs, and Morgan Stanley. These developments highlight Royal Caribbean’s ongoing efforts to expand its fleet and manage its financial commitments efficiently.
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