Wedbush Upgrades Royal Caribbean On Pricing, F/X & Valuation

In a report published Monday, analysts at Wedbush upgraded

from Neutral to Outperform. The price target was raised from $81 to $88. According to Wedbush, Royal Caribbean still has "a great deal of earnings momentum, the most significant and reliable cost controls in the cruise space, arguably the most valuable cruise brand, and what is now a sizeable discount with respect to valuation." The company witnessed double-digit pricing growth in April, while pricing in the overall industry also rose for the Caribbean region. The analysts believe the price hike was a result of improvement in the capacity dynamics in this region. Changes in the fuel prices and FX have also positive impacted the company's performance so far in the quarter. "While we believe that RCL shares ‘should' trade independently of these uncontrollable forces, a reversal of their impact on reported earnings is a welcome (albeit unreliable) development," the analysts said. The EPS estimate for Royal Caribbean for 2015 has been raised to $4.65.