Royal Caribbean (RCL) Flat Despite a New Buy Rating
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Price: $283.09 -1.91%
Rating Summary:
25 Buy, 13 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 22 | New: 15
Rating Summary:
25 Buy, 13 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 22 | New: 15
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Shares of Royal Caribbean Cruises (NYSE: RCL) are slightly lower Wednesday despite winning over a new bull this morning.
Credit Suisse raised its investment rating on the second-largest cruise vacation company from Neutral to Outperform and set a $55 price target, saying low supply and pricing power should drive earnings.
"While the new cruise cycle is still in its early innings, investing in these stocks requires a view that industry pricing power will continue to recover in the face of a still sluggish global economy," stated analyst Joel Simkins.
"We believe RCL is well positioned to benefit from one of the most attractive and youngest fleets in the industry, strong relative earnings leverage (1% in net yield adds 7.3% to 2011 EPS versus 5.8% for CCL), disciplined fuel hedging strategies, and balance sheet deleveraging initiatives, which should allow it to generate earnings power above prior peak levels during the next few years. In addition, slowing supply growth and a better commitment to expanding returns over cost of capital should further assist in driving increased long-term earnings power," he continued.
Shares of Royal Caribbean are down 0.6 percent to $40.26 at last check.
Credit Suisse raised its investment rating on the second-largest cruise vacation company from Neutral to Outperform and set a $55 price target, saying low supply and pricing power should drive earnings.
"While the new cruise cycle is still in its early innings, investing in these stocks requires a view that industry pricing power will continue to recover in the face of a still sluggish global economy," stated analyst Joel Simkins.
"We believe RCL is well positioned to benefit from one of the most attractive and youngest fleets in the industry, strong relative earnings leverage (1% in net yield adds 7.3% to 2011 EPS versus 5.8% for CCL), disciplined fuel hedging strategies, and balance sheet deleveraging initiatives, which should allow it to generate earnings power above prior peak levels during the next few years. In addition, slowing supply growth and a better commitment to expanding returns over cost of capital should further assist in driving increased long-term earnings power," he continued.
Shares of Royal Caribbean are down 0.6 percent to $40.26 at last check.
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