BMO Picks Royal Caribbean as Top Cruise Stock, Cautions on Norwegian and Carnival
RCL•BMO Securities assigned Royal Caribbean a market outperform rating as its top cruise pick and maintained market perform and underperform ratings on Norwegian Cruise Line and Carnival. The analyst cited RCL’s stronger balance sheet, higher onboard revenue per passenger, and robust booking trends driving its favorable outlook.
1. BMO Ratings Highlights
BMO Securities designated Royal Caribbean as its market outperform pick, making it the firm’s top choice in the cruise sector. Norwegian Cruise Line received a market perform rating while Carnival was rated underperform, reflecting differentiated views on financial resilience and growth potential.
2. Royal Caribbean Strengths
The analyst pointed to RCL’s stronger balance sheet with lower leverage, higher onboard spend per passenger and healthy forward booking curves as key advantages. Expectations of sustained yield growth and margin expansion into 2026 underpin the positive outlook.
3. Concerns for Norwegian and Carnival
Norwegian and Carnival were viewed with caution due to elevated debt-to-capital ratios and slower rebound in ticket pricing power. BMO warned that cash flow pressures and narrower yield recovery could limit upside relative to Royal Caribbean.
