Truist raised their price targets on cruise line stocks Royal Caribbean (NYSE: RCL) and Norwegian Cruise Line (NYSE: NCLH) in a note to investors on Tuesday.
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Analyst Patrick Scholes raised Royal Caribbean's price target to $62 from $58 per share, maintaining a Hold rating on the stock, while Norwegian's price target was lifted to $21 from $19 per share, with its Buy rating maintained.
Scholes told investors in his note that “positive milestones” and “encouraging trends” from his conversations with travel agency executives and big data on future bookings prompted his price target increases on the stocks.
He said there is an expectation that the fourth quarter will see pricing up compared to 2019 levels, while the booking pace for the current quarter accelerated without a significant drop in pricing.
The cruise line industry was significantly impacted by the pandemic, as travel, especially vacation related, was at a standstill.
In contrast to Truist, Norwegian was downgraded to Underperform from Outperform last week by Credit Suisse, who said in a research note that they see downside risk to estimates and prefer shares of Royal Caribbean. In addition, Credit Suisse stated Norwegian's fiscal 2023 EBITDA guidance is at risk from higher than expected costs, and the stock's valuation premium will likely prove “unsustainable.”
Norwegian shares closed Tuesday's session up 0.56%, while Royal Caribbean edged 0.07% higher.