Stifel 'Absolute Buyers' Of Royal Caribbean Ahead Q1 Print

Stifel is bullish on Royal Caribbean Cruises Ltd RCL ahead of the cruise line's first-quarter report. 

The Analyst 

Analyst Steven Wieczynski reiterated a Buy rating on Royal Caribbean with a $152 price target.

The Thesis

Royal Caribbean Cruises is expected to release Q1 earnings in late April.

“We are absolute buyers of RCL shares ahead of 1Q18 earnings, as our expectation for a 1Q18 yield-driven EPS beat, [a] better-than-expected 2Q18 guide/summer Caribbean commentary and positive revision to the bottom end of management’s full-year yield guidance range should be well-received by investors,” the analyst said. 

Stifel projects that shares will trade significantly higher following a Q1 beat. The cruise line's commentary surrounding summer 2018 Caribbean booking trends is likely to generate the most attention from investors, especially those with shorter time horizons, Wieczynski said. 

“Based on what we have gathered from our recent conversations with executives throughout the industry and our local travel agent network, we believe investors are totally overshooting on the potential impact of the ‘Hurricane Hangover’ on RCL’s business," the analyst said. "By and large, we believe RCL turned the year in a record booked position and achieved record results throughout ‘Wave Season.'"

Price Action

Royal Caribbean shares were down 0.19 percent at the time of publication Thursday at $118.08. 

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