What Happened?
Shares of cruise vacation company Royal Caribbean (NYSE: RCL) jumped 3.3% in the afternoon session after TD Cowen analyst Tom Fitzgerald raised the company’s price target to $340 from $337 while maintaining a Buy rating. According to StreetInsider, TD Cowen analyst Tom Fitzgerald raised RCL’s price target to $340 as part of a third-quarter earnings preview while keeping a Buy rating. The $3 increase is modest, but it keeps the firm constructive heading into results scheduled for late October. That preview sits against Royal Caribbean’s own outlook for the quarter: about 8% revenue growth, roughly flat net yields, and adjusted EPS guided to 6.26–6.36, with management still pointing to record pricing, booking volumes above last year, and early 2027 trends pacing ahead of history despite some geopolitically sensitive itineraries. In that context, TD Cowen’s tweak looks like a fine-tuning of valuation ahead of the print rather than a wholesale thesis change.
After the initial pop, the shares cooled down to $290.60, up 3.1% from the previous close.
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What Is The Market Telling Us
Royal Caribbean’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 27 days ago when the stock dropped 3.9% on the news that the company said it will buy half of Sandals and Beaches Resorts for about $3 billion. Royal Caribbean said the price is about 10 times forward EBITDA. Morgan Stanley has committed the debt to fund it. The company said the deal should close in early 2027, subject to approvals, and that it expects the stake to add to earnings next year. Jason Liberty, chairman and chief executive, said in the release that Sandals is the next step for a vacation platform that already includes Royal Caribbean, Celebrity Cruises, and Silversea. Adam Stewart, executive chairman of Sandals, will keep a leadership role. The company said a board led by Liberty and Stewart will govern the joint venture, and that current reservations, loyalty programs, and both resort and cruise operations continue as they are. The cash and the debt come first. The earnings benefit the company is describing sits in next year, and closing is still early 2027. A half stake also leaves the Stewart family in the business. The open is the market treating that as a bill due now. What would support the stock is evidence, after closing, that resort growth shows up in Royal Caribbean’s results at something close to the 10 times EBITDA it is paying.
Royal Caribbean is up 2.6% since the beginning of the year, but at $290.60 per share, it is still trading 16.5% below its 52-week high of $348.03 from February 2026. Investors who bought $1,000 worth of Royal Caribbean’s shares 5 years ago would now be looking at an investment worth $3,463.
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