Royal Caribbean stock price target raised to $360 from $290 at Bernstein
Investing.com
Published Jul 02, 2025 08:34AM ET
Investing.com - Bernstein SocGen Group raised its price target on Royal Caribbean Cruises (NYSE:RCL) to $360 from $290 while maintaining an Outperform rating on Wednesday. The stock, currently trading near $315, has delivered an impressive 103% return over the past year and is approaching its 52-week high of $318, according to InvestingPro data.
The firm cited Royal Caribbean's transformation since the pandemic, noting that operating margins by the end of 2025 will be 8.3% above 2019 levels. Company-defined return on invested capital (ROIC) reached 16.1% in 2024, significantly above Royal Caribbean's cost of capital. The company maintains a gross profit margin of nearly 50% and generates $16.8 billion in revenue, with InvestingPro analysts projecting 9% revenue growth for 2025.
Bernstein described the ROIC improvement as "real," with a 5.8 percentage point increase driven by "a mix of execution and macro tailwinds." The firm now views Royal Caribbean as a "quality compounder" set for high teens total shareholder return at a 16.5X price-to-earnings multiple.
The price target increase reflects Royal Caribbean's improving ROIC profile, with Bernstein raising its target multiple to 15.5X next-twelve-months+1 P/E. This represents a significant upgrade from the previous target of $290.
Before the pandemic, Royal Caribbean operated with margins below 20% and was "just about making its cost of capital" with an ROIC of approximately 10%, according to Bernstein's analysis. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with 16 additional ProTips and comprehensive financial metrics available to subscribers through the Pro Research Report.
In other recent news, Royal Caribbean Cruises has been the focus of several significant developments. Moody's Ratings upgraded Royal Caribbean's senior unsecured rating to Baa3 from Ba1, reflecting the company's strong financial performance and improved financial leverage. The agency anticipates continued growth in demand for cruises, which could bolster revenue and earnings. Meanwhile, UBS analysts maintained a Buy rating with a price target of $301, highlighting that the company's financial guidance exceeded market expectations, particularly after a robust first-quarter performance.
Additionally, Stifel analysts raised their price target for Royal Caribbean to $310, citing strong demand and confidence in the company's guidance for the second half of 2025. They noted Royal Caribbean's optimistic outlook despite concerns about a potential slowdown in demand. Bernstein also reiterated an Outperform rating with a price target of $290, recognizing the company's expansive ships and private island experiences as key factors in its strong market positioning.
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In corporate leadership news, Royal Caribbean announced that Richard Fain will retire as Chairman in Q4 2025, with CEO Jason Liberty set to assume the role. John Brock will become the Independent Lead Director, supporting the company's governance and growth. These leadership changes are part of Royal Caribbean's long-term planning strategy.
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Written By: Investing.com
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