Stifel Raises Price Targets On Carnival & Royal Caribbean Cruises

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Stifel raised its price targets on Carnival Corporation CCL and Royal Caribbean Cruises Ltd RCL while maintaining Buy ratings on both companies.

Analyst Steven Wieczynski praised Carnival management for achieving “$20M in collaborative cost savings in FY14 and believes it will be able to increase the total amount saved to over $100M by FYE15.”

Wieczynski saw momentum building for Carnival. “First, management noted its booked load position, both for EAA and NA brands, is better today than it was at the same time last year. That said, we believe CCL is favorably positioned to take price as the critically important “wave” season kicks off in earnest in a few short weeks. Second, in response to recent fleet reinvestment efforts, CCL continues to benefit from a lift in guests’ onboard spending."

The firm raised its price target from $52 to $54 on Carnival Corporation.

For Royal Caribbean, Wieczynski noted that “you have a stock that is trading at 14x forward earnings (2016) for average EPS growth of 28 percent/year for the next three years. When we look back at where Carnival Corp. has traded (15x-17x) on average on a forward EPS basis and then apply the same multiple to RCL, there is clearly a significant amount of upside from current levels.”

The firm raised its price target from $88 to $96 on Royal Caribbean Cruises Ltd.

Carnival closed at $44.86, up 0.16 percent.

Royal Caribbean closed at $81.60, up 1.25 percent.

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Posted In: Analyst ColorPrice TargetAnalyst RatingsSteven WieczynskiStifel
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