Citi has revised its price target for Royal Caribbean Cruises Ltd. (RCL, Financial), reducing it from $304 to $263 while maintaining a Buy rating on the stock. This adjustment comes as leisure stocks, including cruise and theme park sectors, face significant sell-offs following the recent tariff announcement dubbed "Liberation Day" by President Trump. According to Citi, this broad sell-off does not accurately reflect the varied risk landscape across different leisure segments.
The firm's evaluation considers the potential impacts of newly announced tariffs, estimating that companies will experience the full effects of these tariffs by the second half of 2025. However, Citi anticipates that businesses can mitigate these impacts by 50% in fiscal 2026 through policy changes and exclusions, with further reductions of up to 25% expected by fiscal 2027. This forecast incorporates both direct tariff exposure and a projected slowdown in consumer spending within the leisure industry.
The reassessment highlights how certain sectors, such as cruise lines and theme parks, may be oversold in the current market environment, suggesting opportunities for investment in these areas. Citi's analysis underscores the complex challenges and potential strategies for companies navigating the evolving tariff landscape.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for Royal Caribbean Group (RCL, Financial) is $276.07 with a high estimate of $330.00 and a low estimate of $220.00. The average target implies an upside of 44.01% from the current price of $191.70. More detailed estimate data can be found on the Royal Caribbean Group (RCL) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, Royal Caribbean Group's (RCL, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Royal Caribbean Group (RCL, Financial) in one year is $177.84, suggesting a downside of 7.23% from the current price of $191.7. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Royal Caribbean Group (RCL) Summary page.
