UBS reiterates Buy on Royal Caribbean stock on TUI cruise data

UBS has reaffirmed its Buy rating and set a $367 price target on Royal Caribbean Cruises (RCL) stock, following TUI cruise data. The stock is currently priced at $234.89, near its 52-week low of $231.03 and below its 52-week high of $356.39. TUI Cruises, a joint venture partner, announced a 12% increase in capacity for the September quarter, driven by the addition of three ships over the past two years, raising the total to 19 ships.

Daily rates rose by 2%, while occupancy remained unchanged. For the December 2026 and March 2027 quarters, capacity is expected to increase by 17%, with a 2% rise in daily rates. Occupancy is projected to be 6 points lower for the six-month period due to revised itineraries following the Middle East conflict, although bookings are improving as consumers book closer to departure dates.

Despite a one-off EUR 65-70 million net financial loss due to cancellations of Mein Schiff 4 and Mein Schiff 5 from March to mid-May 2026, UBS anticipates a 12% growth in joint venture income per share for Royal Caribbean's September quarter, surpassing consensus expectations of flat growth. For the December quarter, UBS expects a 15% growth in joint venture income per share, slightly above consensus forecasts of 12% year-over-year growth.