RCL Stock Gains 17% In A Week: Citi Drops Upside Catalyst Watch As Investors Warm To Sandals Deal

• Royal Caribbean expects the Sandals transaction to be accretive to earnings in 2027.
• JPMorgan, BofA and Deutsche Bank have recently raised targets or upgraded their ratings on RCL.
• According to Koyfin data, 22 of 29 analysts rate RCL 'Buy' or 'Strong Buy.’

Royal Caribbean Group (RCL) received a fresh analyst update after Citi removed its 'upside 90-day catalyst watch' on the stock, while maintaining a 'Buy' rating and $362 price target.

RCL shares traded 2.40% higher in premarket trading on Friday at the time of writing.

According to The Fly, Citi cited RCL's 17.23% rally over the past week as a reason for removing the stock from its 90-day Catalyst Watch. 

The analyst said investors “appear to have warmed a bit” to Royal Caribbean's planned acquisition of Sandals.

Citi Removes Near-Term Catalyst Watch

Citi had added RCL to its positive 90-day Catalyst Watch in September. According to TheFly, the earlier call cited upcoming events including Royal Caribbean's third-quarter earnings and its planned analyst day in November.

The latest action changes the Catalyst Watch status but does not alter Citi's 'Buy' rating or $362 price target, according to The Fly.

What Is The Sandals Deal?

Royal Caribbean announced in September that it would invest approximately $3 billion for a 50% equity interest in Sandals and Beaches Resorts. The transaction values the resort business at approximately $6 billion and is expected to close in early 2027, subject to customary closing conditions and approvals.

The investment expands Royal Caribbean's portfolio into the all-inclusive resort market. Sandals and Beaches operate resorts across the Caribbean, while Royal Caribbean's existing portfolio includes its cruise brands and other vacation experiences.

Royal Caribbean said the partnership will allow the companies to combine complementary vacation offerings while maintaining their respective operations.

Royal Caribbean expects the Sandals transaction to be accretive to earnings in 2027, according to the company's announcement. The company has secured committed debt financing from Morgan Stanley for the investment. Following completion, the joint venture will be governed by a board under the shared leadership of Royal Caribbean CEO Jason Liberty and Sandals Executive Chairman Adam Stewart.

Street Take On RCL

Recently, JPMorgan raised its price target on RCL to $394 from $345 while maintaining an 'Overweight' rating. Bank of America (BofA) upgraded RCL to 'Buy' from 'Neutral', while Deutsche Bank upgraded it to 'Buy' from 'Hold', according to TheFly.

According to Koyfin data, 22 out of 29 analysts covering RCL rate the stock 'Buy' or 'Strong Buy.'

RCL: Retail View 

Retail sentiment on Stocktwits was ‘neutral’ with ‘normal’ message volumes in the past 24 hours.

RCL stock has lost about 6% year-to-date.

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