Argus upgraded Royal Caribbean (NYSE:RCL) to a Buy rating (From Hold) and set a 12-month price target on the stock at $88.00 after the cruise line reported high cruise occupancy in 1Q23.
Analysts believe that the company’s strong showing point to a demand recovery and is likely to result in stronger-than-anticipated revenue and earnings.
They wrote in a note, “We think that high cruise occupancy in 1Q23 points to a demand recovery and is likely to result in stronger-than-anticipated revenue and earnings. We also look for margins to strengthen and expect new ships to launch over the next 12 months.”
On May 4, Royal Caribbean reported a 1Q23 adjusted loss of (0.23) per share, compared to a loss of ($4.57) per share in the same period a year earlier. The consensus estimate had called for an adjusted loss of ($0.69) per share.
Revenue for the quarter was reportedly $2.89 billion, up from $1.06 billion in the prior-year period. Revenue topped the consensus forecast by $75M.
Argus raised their 2023 EPS estimate to $4.80 from $4.00 and 2024 estimate to $6.10 from $4.90.
Shares of RCL are up 0.91% in pre-market trading on Tuesday.