Stifel reiterates Buy rating on Royal Caribbean stock with $420 target

Investing.com - Stifel has reiterated its Buy rating on Royal Caribbean Cruises (NYSE:RCL) with a price target of $420.00, following analyst meetings with the company’s management team aboard its newest vessel, Star of the Seas. The stock, currently trading at $313.95, has delivered an impressive 36.95% return year-to-date. According to InvestingPro data, the company boasts a perfect Piotroski Score of 9, indicating strong financial health.

The firm believes Royal Caribbean’s fiscal year 2027 targets, which include a 20% adjusted EPS compound annual growth rate from FY24 and high-teens return on invested capital, appear increasingly conservative as the company projects 31% year-over-year EPS growth for FY25. With a PEG ratio of 0.46, the stock is trading at an attractive valuation relative to its growth prospects. For deeper insights into RCL’s valuation metrics and growth potential, check out the comprehensive analysis available on InvestingPro.

Stifel notes that new cruise ships will support yield improvements in FY26, while progress in loyalty programs and precruise booking penetration should drive continued strong onboard revenue performance.

The research firm identifies Perfect Day Mexico as the most significant upcoming catalyst for Royal Caribbean , potentially generating double-digit percentage yield increases for a meaningful portion of the company’s deployment mix when it becomes fully operational in FY28.

Royal Caribbean’s management team, including the CEO and CFO, provided these insights during Stifel’s visit to the company’s newest ship, reinforcing the firm’s positive outlook on the cruise operator’s growth trajectory.

In other recent news, Royal Caribbean Cruises reported strong second-quarter earnings that surpassed both company guidance and market expectations. This performance led UBS to raise its price target for the company to $353, maintaining a Buy rating. The cruise line’s improved expense guidance and lower interest expenses contributed to this positive outlook. Stifel also increased its price target for Royal Caribbean to $420, viewing recent stock sell-offs as a buying opportunity. Despite these positive developments, Bernstein SocGen Group reiterated an Outperform rating with a $360 price target, noting mixed quarterly results and lower-than-expected third-quarter yield growth guidance. Truist Securities maintained a Hold rating with a $337 price target, citing better-than-expected costs and contributions from the TUI brand, though revenues were slightly below forecasts. Mizuho raised its price target to $372, maintaining an Outperform rating, while highlighting concerns about the stock’s all-time highs and the second-half outlook. These recent developments provide various perspectives on Royal Caribbean’s performance and future expectations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.