Is Royal Caribbean Cruises (RCL) Stock a Buy? This Analyst Says Yes

Even the most risk tolerant investor might wonder if now is the time to invest in cruise line stocks. As you would expect, the industry has been floored by COVID-19, Read More... The post Is Royal Caribbean Cruises (RCL) Stock a Buy? This Analyst Says Yes appeared first on TipRanks Financial Blog.

Is Royal Caribbean Cruises (RCL) Stock a Buy? This Analyst Says Yes

Even the most risk tolerant investor might wonder if now is the time to invest in cruise line stocks. As you would expect, the industry has been floored by COVID-19, and stocks across the sector have consequentially nosedived. Case in point: shares of Royal Caribbean Cruises () have sunk 70% year-to-date.

But Nomura analyst Harry Curtis thinks there’s plenty of upside when considering RCL as long-term investment. Curtis rates RCL stock a Buy along with a $62 price target. Should Curtis’ thesis play out, investors could be taking home a 79% gain. (To watch Curtis’s track record, )

Curtis noted, ”We continue to recommend RCL, as we believe it is among the best-positioned lines to emerge from the Great Lockdown. We continue to wait on two key catalysts for the group: 1) an agreement with the CDC on health protocols to restart operations and 2) the establishment of a restart date that gives operators time to market itineraries and begin rebuilding cash positions.”

But first of all, the embattled cruise operator must sail through more choppy waters. Well, metaphorically at least.

As expected, bookings have “meaningfully” dropped so far this year, although prices are down only single digits. Curtis argues this is because reducing prices now for 2H “will not stimulate demand in the current environment.” Looking ahead to next year, bookings remain relatively healthy, although with RCL reporting the figure is within “historical ranges,” Curtis believes the phrase indicates them to be “at the low end of normal ranges.” Nevertheless, the analyst thinks demand should increase with the loosening of travel restrictions.

“We believe that core consumers (~75% of guests) who see the product as a lifestyle choice will return to cruising within the next six to nine months. However, “new to cruise” consumer demand could take longer to materialize,” Curtis concludes.

So, that’s Nomura’s view, let’s turn our attention now to rest of the Street: RCL’s 5 Buys, 6 Holds and 1 Sell coalesce into a Moderate Buy rating. There’s plenty of upside - 79.77% to be exact – should the $68.33 average price target be met in the next 12 months. (See Royal Caribbean stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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How COVID-19 has changed Canadians’ shopping habits

Financial pros share real talk on managing your cash flow, and even making room for the occasional reward, while the pandemic continues to cause uncertainty around our jobs and income. The post How COVID-19 has changed Canadians’ shopping habits appeared first on MoneySense.

How COVID-19 has changed Canadians’ shopping habits

I’ve always enjoyed online shopping, but COVID-19 has put us in some uncharted economic waters that are difficult for many and has limited much of Canada’s non-essential shopping to the internet. Should we be cyber-spending right now? Canadians are still buying, just differently than they did before. Being physically distant has impacted how much we’re spending, what we’re buying and why.     

Shopping in survival mode

According to , an advice-only Certified Financial Planner with Money Coaches Canada in Vancouver, BC, most people have cut spending back to necessities. Bridge explains: “Extra-curricular activities, eating out, entertainment and events have all been cancelled.” As well, caution and the conditions of physical distancing have Canadians holding back on making most big-ticket purchases, he says. It’s difficult to buy and sell houses, RVs or vehicles while physically distancing, and Canadians prefer a stable economy before investing in costly items—and “nobody knows how long this will last, or what the economy will look like after the pandemic.”

Many have no choice but to preserve cash flow in survival mode simply to pay for essentials and are struggling to get by, while others, like healthcare workers, have no time to spend money. 

Boredom busting

At the same time, Toronto’s , an accredited personal financial counsellor, says she’s noticed some Canadians are shopping online for things to treat themselves in an attempt to ease frustration and boredom. “Those who are privileged to still have their full income haven’t changed a lot in how much they spend; just where they spend it.” she says. 

What are people spending on right now? Moorhouse says restaurant take-out and meal kits aren’t being bought as often as before Coronavirus. She’s seeing more money going towards self-care (including psychotherapy), home décor to beautify our surroundings, and kitchen items for the increase in cooking and baking at home. Moorhouse also reveals her work on clients’ budgets surprisingly doesn’t show a big increase in grocery bills. She rationalizes we’re stocking up each time we buy essentials, which can feel more expensive than frequent trips to the store for only a few items.   

Bridge has noticed an increase in buying gear for outdoor activities, especially bicycles and the cost to get them serviced or tuned; small home improvement materials; gardening items; and, of course, . He also points out an increase in buying online entertainment, like streaming movies, online gaming and even some gambling. 

“We’ve recently bought an above-ground pool and a propane fire pit for outdoor family time,” says Kyla Cornish of Cranbrook, B.C., who agrees with the financial pros’ assessments. Like a lot of parents, she says her online shopping is focused on keeping her two kids entertained at home now and through the summer. 

In Toronto, Heather Jones took to the Internet to purchase some inexpensive arts and crafts supplies for herself. “Tracking the package gives me something to look forward to, and completing the craft gives me a feeling of accomplishment,” she says. 

Overspending can still happen

Quarantine boredom and frustration can easily lead to overspending online. And without clear plans for where your money goes, spending can quickly exceed income, creating debt that could become unmanageable. 

If Canadians are watching their wallets, should we be splurging on occasional treats for ourselves to make quarantine bearable? Definitely, Moorhouse says. “If your overall financial plan is solid with bill payments covered and proper savings accruing, buy what pleases you.” 

And while it may seem counterintuitive, Moorehouse says online shopping can help to reduce impulse spending temptations you might experience when shopping in physical stores. “Shopping online gives us time to think about our spending,” she expands. “There’s no sense of urgency; no immediate sale or last item on the rack we don’t want to miss. There’s less pressure to buy when you can think about it and return to that website tomorrow.”

To prevent your online spending from exceeding the amount of cash you have available for discretionary purchases, Bridge recommends before you shop, ask yourself:

“Do I need this?”

Bridge acknowledges the psychological benefits of a reward, so you don’t necessarily have to limit your buying to food and supplies. He advocates setting goals and rewarding your achievement within your means. 

“Can I get it cheaper or free elsewhere?”

Neighbourhood buy-and-sell groups, Kijiji and Craigslist have discount or even free items. Treating yourself doesn’t need to be costly. 

“Will buying this bring me closer to my goals?”

This question can halt any spending spree. If you’re saving for an important long-term goal, impulse buys can delay your progress. Bridge suggests reviewing current expenses to find some “mad money” to use for online shopping urges; trim things like subscriptions or apps you don’t use and can cancel; renegotiate phone, cable or Internet packages. 


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