Royal Caribbean (RCL) Stock Receives Dual Upgrades Before Carnival Reports Q3 Results

Key Takeaways

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Both Bank of America and Deutsche Bank raised Royal Caribbean (RCL) to Buy ratings this Monday.
RCL shares have declined 26% from their August 5 peak.
Tigress Financial maintained its Buy stance, highlighting the upcoming Sandals Resorts collaboration.
Carnival (CCL) is scheduled to release its third-quarter financial results on Tuesday, setting the tone for cruise stocks.
Wall Street forecasts Carnival’s adjusted earnings at $1.35 per share, down from $1.43 in the prior-year period.

Shares of Royal Caribbean (RCL) edged slightly lower to $242.43 during Monday’s session, following a 1.6% gain that closed at $242.70 on Friday. The modest decline occurred as a pair of prominent financial institutions upgraded the cruise line operator just ahead of competitor Carnival’s quarterly report.

Royal Caribbean Cruises Ltd., RCL

Both Deutsche Bank and Bank of America elevated their ratings on Royal Caribbean to Buy this Monday. Each firm pointed to the stock’s significant retreat from early August levels as creating a more favorable risk-reward profile for investors.

Since reaching its peak on August 5, Royal Caribbean shares have tumbled 26%. The stock now sits approximately 13% lower for 2025 and has fallen beneath both its 50-day and 200-day moving average trendlines.

Deutsche Bank maintained its existing price objective of $299. The investment bank indicated that the recent downturn offers a more compelling entry opportunity compared to earlier months this year.

Meanwhile, Bank of America’s Andrew Didora upgraded his stance from Neutral to Buy, establishing a $330 price objective. In his research note, he described Royal Caribbean as a “high quality business” with solid fundamentals.

Catalysts Behind the Bullish Shift

Didora highlighted the company’s strategic investment in Sandals Resorts as a significant growth catalyst. His projections suggest the partnership could contribute an additional $900 million in Ebitda by the end of the decade.

“The macro is a risk, but travel spend has been very strong, estimates seem reasonable, and RCL is well positioned to capture further travel share,” Didora wrote.

Tigress Financial Partners also issued commentary on Monday. The research firm maintained its Buy recommendation and $425 price target—the most optimistic projection among the analysts covered.

Tigress emphasized that the Sandals and Beaches Resorts collaboration enhances Royal Caribbean’s competitive position in the global leisure travel market. The firm characterized the stock’s recent weakness as presenting a favorable long-term accumulation opportunity.

According to their analysis, RCL currently trades at a price-to-earnings multiple of 15.01 and appears undervalued relative to its intrinsic worth. This assessment aligns with InvestingPro’s valuation framework for the shares.

Tigress further noted that the Sandals transaction adds premium hospitality earnings at approximately 10 times Ebitda. The firm anticipates the alliance will enhance customer retention metrics and increase lifetime guest value over the coming years.

Carnival’s Quarterly Report Could Set Industry Tone

Carnival (CCL) is set to announce its fiscal third-quarter performance before market open on Tuesday. Analyst consensus calls for adjusted earnings of $1.35 per share, representing a decline from the $1.43 reported in the same quarter last year.

Revenue projections point to modest 3% growth reaching $8.39 billion, based on FactSet data. Carnival shares declined 0.6% to close at $22.10 on Monday.

The cruise sector has navigated challenging conditions throughout 2025. Elevated fuel expenses linked to ongoing U.S.-Iran tensions, a hantavirus outbreak that impacted bookings, and consumer preference shifts toward domestic destinations have pressured financial performance across the industry.

Fuel cost volatility remains the primary uncertainty factor. Diplomatic negotiations between Washington and Tehran to resolve the standoff continue without resolution.

Other major cruise operators also experienced downward pressure Monday. Norwegian Cruise Line (NCLH) and Viking Holdings (VIK) each dropped approximately 1.5% during the trading session.

Additional Wall Street analysts have adopted increasingly constructive views on Royal Caribbean in recent weeks. JPMorgan elevated its price target to $394 while maintaining an Overweight rating, pointing to improving yield trends.

Bernstein SocGen reaffirmed its Outperform rating alongside a $355 target price. UBS maintained its Buy recommendation with a $367 objective following encouraging preliminary results from TUI Cruises, Royal Caribbean’s joint venture partner.

TUI disclosed a 12% increase in vessel capacity and a 2% improvement in per-day pricing for the quarter ending in September. Goldman Sachs has also maintained its Buy rating with a $360 price target on Royal Caribbean shares.

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