Royal Caribbean Cruises (RCL) Gets Rating Upgrade at JPMorgan

NEW YORK (TheStreet) -- Analysts at JPMorgan increased their rating on Royal Caribbean Cruises (RCL) to "overweight" from "neutral" on Tuesday.

The firm said it raised its rating on the cruise operator based on the company's valuation and expectations that Royal Caribbean will benefit from new ship introductions, which should drive growth in the China and Asia Pacific regions.

JPMorgan has upped its price target to $90 from $83 on Royal Caribbean stock.

Shares of Royal Caribbean are up by 1.70% to $77.01 at the start of trading this morning.

Miami, FL.-based Royal Caribbean operates cruises using a variety of brand names including Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France. The company also has a 50% joint venture with TUI Cruises.

Separately, TheStreet Ratings team rates ROYAL CARIBBEAN CRUISES LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROYAL CARIBBEAN CRUISES LTD (RCL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 66.66% and other important driving factors, this stock has surged by 40.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RCL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ROYAL CARIBBEAN CRUISES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ROYAL CARIBBEAN CRUISES LTD increased its bottom line by earning $3.42 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $3.42).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 71.0% when compared to the same quarter one year prior, rising from $26.46 million to $45.23 million.
  • Net operating cash flow has increased to $426.43 million or 35.03% when compared to the same quarter last year. In addition, ROYAL CARIBBEAN CRUISES LTD has also vastly surpassed the industry average cash flow growth rate of -16.93%.
  • You can view the full analysis from the report here: RCL Ratings Report

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