Royal Caribbean’s Fuel Hedges Limit Losses to 8.7% as Target Rises to $350
Royal Caribbean limited weekly losses to 8.74% thanks to fuel hedges and cost absorption, versus Carnival’s 15% drop over the same period. With two-thirds of 2026 capacity booked at record rates and a new beach club expansion, TD Cowen raised its price target to $350.
1. Hedging Strategy Limits Fuel Cost Impact
Royal Caribbean’s fuel hedging program and decision to absorb rising oil costs rather than passing surcharges to customers helped cap its share decline at 8.74% over the past week, compared with Carnival’s 15% drop over the same period.
2. Strong Bookings and Expansion Plans
The company has two-thirds of its 2026 passenger capacity booked at record-high pricing levels and is advancing expansion projects, including the Royal Beach Club Paradise Island, bolstering forward revenue visibility.
3. Analyst Upgrade and Outlook
TD Cowen raised its price target on Royal Caribbean to $350, citing its diversified revenue streams, disciplined hedging and booking momentum; future stock performance will hinge on sustained oil price movements.