Royal Caribbean Cruises (RCL): Cutting Estimates on FX and Fuel -

UBS Buy Royal Caribbean Cruises (NYSE: RCL) price target of $99.00 (from $106.00)

For RCL, about 27%-30% are European passenger sourced (incl. UK), and UK is ~12%- 13%. For CCL, about 33%-34% are European passenger sourced (incl. UK), and 11% of CCL's capacity is in UK sourcing brands but UK-sourced passengers are 7% of total. For NCLH, about 15-20% int'l passenger sourcing (primarily Europe), UK is ~5%-7%.

Every 10ppt change in FX could impact FY'16E EPS: ~$0.68-$0.69 to our EPS est. for RCL. Separately fuel has moved up since both RCL and NCLH have reported, while CCL absorbed $0.10 of fuel and $0.07 of FX headwinds for the yr.

A stronger USD against a basket of currencies, including weaker EUR & GBP, would mean roughly $0.05-$0.06 negative EPS impact on Q2, $0.30 impact on FY'16E, and $0.58 impact on '17E.

For an analyst ratings summary and ratings history on Royal Caribbean Cruises click here. For more ratings news on Royal Caribbean Cruises click here.

Shares of Royal Caribbean Cruises closed at $66.40 yesterday.

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