Wells Fargo Upgrades Royal Caribbean (RCL) to Outperform
RCL Hot Sheet
Rating Summary:8 Buy, 4 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Wells Fargo upgrades Royal Caribbean (NYSE: RCL) to Outperform w/ $24-$26 valuation range on '11 estimates.
Wells analyst says, "Upgrading shares of RCL to Outperform as investors are (1) not fully recognizing the positive mix impact on '10 & '11 net yields of the newer class Oasis and Solstice ships (22% and 24% of YE '10 & '11 annualized berths), (2) not fully understanding the favorable '10 & '11 operating cost leverage of newer ships/in place cost initiatives, (3) not realizing in '11 RCL should generate free cash flow, (4) yet to appreciate implications of low/mid single digit industry capacity growth in ’11-’14 (capacity for '11-'12 is fixed), and (5) largely discounting concerns about RCL's sourcing mix vs. CCL and sustainability of consumer spending.
"Downwardly fine-tuning our '09/'10 EPS ests to $0.74/$1.58 from $0.78/$1.62 primarily on fuel and raising our '11 EPS est to $2.42 (consensus $1.97) from $2.27 on our outlook for net yields."
To see more analyst ratings on RCL Click Here.
Royal Caribbean Cruises Ltd. operates in cruise vacation industry in North America and internationally.
Wells analyst says, "Upgrading shares of RCL to Outperform as investors are (1) not fully recognizing the positive mix impact on '10 & '11 net yields of the newer class Oasis and Solstice ships (22% and 24% of YE '10 & '11 annualized berths), (2) not fully understanding the favorable '10 & '11 operating cost leverage of newer ships/in place cost initiatives, (3) not realizing in '11 RCL should generate free cash flow, (4) yet to appreciate implications of low/mid single digit industry capacity growth in ’11-’14 (capacity for '11-'12 is fixed), and (5) largely discounting concerns about RCL's sourcing mix vs. CCL and sustainability of consumer spending.
"Downwardly fine-tuning our '09/'10 EPS ests to $0.74/$1.58 from $0.78/$1.62 primarily on fuel and raising our '11 EPS est to $2.42 (consensus $1.97) from $2.27 on our outlook for net yields."
To see more analyst ratings on RCL Click Here.
Royal Caribbean Cruises Ltd. operates in cruise vacation industry in North America and internationally.
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