Investing.com -- Bank of America analysts raised their price targets for cruise line operators Royal Caribbean (NYSE: RCL) and Norwegian Cruise Line (NYSE: NCLH) Holdings ahead of their Q3 earnings reports.

The bank said in a note Monday that RCL is now targeted at $205, up from $172, while NCLH's price objective has been raised to $25 from $23.

"Cruise stocks have had strong performance since early September, with the group up an average of 26% versus the S&P 500's 5.1%," said BofA.

This surge was driven by solid consumer spending, lower crude prices, and rate cut expectations. BofA expects RCL and NCLH to echo Carnival (NYSE: CCL)'s recent constructive comments on bookings, suggesting momentum will carry into 2025.

RCL will report earnings on October 29, and BofA is optimistic, projecting results above the company's guidance.

"We are modestly above the high end of the company's net yield and EPS ranges (+7.3% vs. +6.5-7%; $5.10 vs. $4.90-5.00)," the analysts noted.

While disruptions like Hurricane Milton and a canceled Icon (NASDAQ: ICLR) of the Seas sailing could weigh on Q4 revenue, BofA maintains its Q4 net yield forecast of +6.1%.

The analysts also said they see a potential share buyback announcement during RCL's earnings call, suggesting that debt transactions completed in Q3 could pave the way.

NCLH will report on October 31, and BofA expects it to beat expectations, forecasting net yield growth of +7.1% versus the company's guidance of +6.1%.

Their EPS estimate for the company stands at $0.95 versus the company's $0.92 guide.

RCL is currently trading at nearly 12x 2025 EBITDA, while NCLH is at about 9.5x, both at the high end of historical valuations.

"It is hard to fight the momentum," BofA remarked. "We believe this is appropriate given continued healthy yield trends and steady macro trends, and we maintain our Neutral ratings."