Analysts from Stifel Nicolaus have raised the rating of Royal Caribbean Cruises (NYSE: RCL) to buy on account high revenue expectations from their newest & largest ship Oasis.
On board the ship, analysts interacted with senior management of the company and more then 2000 travel agents, all of whom were of the view that for at least the next 8 months the ship will command premium price.
The company believes that though Q4 of financial 2009 can be weak, but next quarter & FY10 will be much better for the company. According to the management, booking volumes & pricing have been rebounding & they have high hopes on Oasis & solstice class ships to bring high revenue for the company going forward.
The company which sources passengers from more then 175 countries said that the demography of its clients are changing & the company is expecting to get around ~50% of is customers from Non US countries by FY12. Management's goals for the foreseeable future include continued cost cutting, international expansion, and driving pricing premiums with new/superior hardware.
Analysts believe that once the market improves and revenue start flowing the company’s profitability will largely increase on account of current steps in cost management. The company does not plan to increase its fleet currently as it feels that increased supply can cause pressure on top line.
Stifel Nicolaus has maintained its buy rating on the company and has set a target price of $28 (13.7x 2011 EPS estimate), their major rationale being attractive investment due to stabilizing fundamentals, ongoing cost containment efforts, and cruising still representing an under-penetrated vacation alternative.
-
Fuel costs out-of-control, strapped U.S. consumers, so time to take an all expense paid cruise? Que Whitney - Ah, Hell to the No. ABN downgraded Carnival Corp. (
