Bernstein analyst Richard Clarke has maintained their bullish stance on RCL stock, giving a Buy rating on May 20.
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Richard Clarke has given his Buy rating due to a combination of factors that highlight Royal Caribbean’s strategic positioning and growth potential in the evolving cruise industry. The cruise sector has transformed from a simple mode of transport to a comprehensive vacation experience, offering unique amenities and private destinations, which enhances its pricing power and broadens its appeal compared to traditional land-based vacations. This shift, combined with a constrained supply environment that lags behind demand, positions the cruise industry as a lucrative investment opportunity.
Royal Caribbean stands at the forefront of this industry transformation with its large ships and exclusive private destinations, setting it apart from competitors. Clarke forecasts that Royal Caribbean can achieve sustainable high teens EPS growth, with a valuation that is attractive compared to other travel sectors. The potential for a market re-rating, alongside catalysts such as improved yield guidance and hidden value in joint ventures, further supports the Buy rating. Clarke emphasizes that Royal Caribbean is not just a short-term momentum play but offers a compelling long-term investment case with its innovative growth strategy and disciplined cost management.
Clarke covers the Consumer Cyclical sector, focusing on stocks such as Marriott International, Airbnb, and Carnival. According to TipRanks, Clarke has an average return of 1.6% and a 46.97% success rate on recommended stocks.
In another report released on May 20, UBS also maintained a Buy rating on the stock with a $311.00 price target.