Royal Caribbean Group (RCL) continues to see growth in operating revenue and cash flow, driven by strong demand for cruises and supported by ongoing expansion of its fleet and land-based resorts, Tigress Financial Partners said in a note Friday.
As revenue and cash flow continue to grow, along with debt reduction and improved operating efficiencies, Royal Caribbean Group expects a significant increase in return on capital and economic profit, which will create substantial shareholder value, said Tigress analysts, including Ivan Feinseth.
The company is also leveraging artificial intelligence to enhance guest experiences and operational efficiency, positioning it to benefit from the growing use of artificial intelligence in the $2 trillion global vacation market, according to the note.
"RCL's best-in-class operations position it to benefit from strong consumer travel spending trends, which is expected to continue for some time as consumers reprioritize spending, which will continue to favor travel and experiences," the analysts said.
Tigress reiterated its buy rating and raised its target price to $330 from $270.
Price: 269.23, Change: -0.97, Percent Change: -0.36
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