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Research Alert: CFRA Lifts Opinion On Shares Of Royal Caribbean Cruises To Strong Buy From Buy
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Research Alert: CFRA Lifts Opinion On Shares Of Royal Caribbean Cruises To Strong Buy From Buy
May 25, 2025 10:44 PM

02:45 PM EDT, 04/29/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our 12-month target to $302 from $297, based on 15x 2025 EV/EBITDA, a significant premium to peers, on strong EPS growth and best-in-class hardware, and within its 9x-15x three-year trading range. We lift our 2025 EPS view to $14.90 from $14.62 and 2026's to $17.32 from $16.18. This reflects steady net yield growth due to new hardware (Star of the Seas launches on August 31, 2025), pricing growth, and occupancy growth. We expect adj. EBITDA margins to increase to 37.9% in 2025 (+170 bps Y/Y) and 38.5% in 2026 (+60 bps Y/Y) driven by three key factors: strong net yield growth, reduced pressure from fuel costs and forex impacts, and improved operating leverage from higher sales volumes. Longer term, we think RCL's core business is strong and on track to achieve a 20% EPS CAGR through 2027, with long-term earnings drivers like new hardware, private island destinations, and river cruising. RCL achieved an investment grade credit rating in Q1, reflecting a significant improvement in its FCF and leverage.

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