Royal Caribbean (RCL) shares slipped modestly in Monday's session even as two of Wall Street's most prominent financial institutions upgraded the cruise operator to Buy, a pair of bullish calls that arrived just ahead of competitor Carnival's quarterly earnings report. With Carnival (CCL) scheduled to release its fiscal third-quarter results on Tuesday, the upgrades set up a pivotal stretch for the cruise sector.

Both Deutsche Bank and Bank of America elevated their ratings on Royal Caribbean to Buy this Monday. Each firm pointed to the stock's significant retreat from early August levels as creating a more favorable risk-reward profile for investors.

Royal Caribbean shares edged slightly lower to $242.43 on Monday, a modest decline that followed a 1.6% gain closing at $242.70 on Friday. Since reaching its peak on August 5, Royal Caribbean Cruises Ltd. stock has tumbled 26%. The shares now sit approximately 13% lower for 2025 and have fallen beneath both their 50-day and 200-day moving average trendlines — widely watched markers of medium- and long-term trend strength — underscoring the depth of the pullback from the summer highs. The disconnect between the ratings upgrades and the stock's softer trading highlights the gap between analysts' longer-term assessments and the market's near-term caution toward cruise names.

Deutsche Bank maintained its existing price objective of $299. The investment bank indicated that the recent downturn offers a more compelling entry opportunity compared to earlier months this year.

Meanwhile, Bank of America's Andrew Didora upgraded his stance from Neutral to Buy, establishing a $330 price objective. In his research note, he described Royal Caribbean as a "high quality business" with solid fundamentals.

Catalysts Behind the Bullish Shift

Didora highlighted the company's strategic investment in Sandals Resorts as a significant growth catalyst. His projections suggest the partnership could contribute an additional $900 million in EBITDA by the end of the decade.

"The macro is a risk, but travel spend has been very strong, estimates seem reasonable, and RCL is well positioned to capture further travel share," Didora wrote.

Tigress Financial Partners also issued commentary on Monday. The research firm maintained its Buy recommendation and its $425 price target — the most optimistic projection among the analysts covering the stock. Tigress emphasized that the Sandals and Beaches Resorts collaboration enhances Royal Caribbean's competitive position in the global leisure travel market, and the firm characterized the stock's recent weakness as presenting a favorable long-term accumulation opportunity.

According to Tigress's analysis, RCL currently trades at a price-to-earnings multiple of 15.01 and appears undervalued relative to its intrinsic worth, an assessment that aligns with InvestingPro's valuation framework for the shares. Tigress further noted that the Sandals transaction adds premium hospitality earnings at approximately 10 times EBITDA. The firm anticipates the alliance will enhance customer retention metrics and increase lifetime guest value over the coming years.

Carnival's Quarterly Report Could Set Industry Tone

Carnival is set to announce its fiscal third-quarter performance before market open on Tuesday, a report expected to set the tone for cruise stocks. Wall Street forecasts Carnival's adjusted earnings at $1.35 per share, down from $1.43 in the prior-year period. Revenue projections point to modest growth of 3%, reaching $8.39 billion, based on FactSet data.

Carnival shares declined 0.6% to close at $22.10 on Monday.

The cruise sector has navigated challenging conditions throughout 2025. Elevated fuel expenses linked to ongoing U.S.-Iran tensions, a hantavirus outbreak that impacted bookings, and consumer preference shifts toward domestic destinations have pressured financial performance across the industry. Fuel cost volatility remains the primary uncertainty factor, as diplomatic negotiations between Washington and Tehran to resolve the standoff continue without resolution. Against that backdrop, Tuesday's report will be parsed for management commentary on fuel costs — the sector's primary flagged uncertainty — and booking trends, offering a read on whether the industry's 2025 headwinds are persisting or easing.

Other major cruise operators also experienced downward pressure on Monday. Norwegian Cruise Line (NCLH) and Viking Holdings (VIK) each dropped approximately 1.5% during the trading session.

Additional Wall Street analysts have adopted increasingly constructive views on Royal Caribbean in recent weeks, extending a run of positive calls on the cruise operator. JPMorgan elevated its price target to $394 while maintaining an Overweight rating, pointing to improving yield trends. Bernstein SocGen reaffirmed its Outperform rating alongside a $355 target price. UBS maintained its Buy recommendation with a $367 objective following encouraging preliminary results from TUI Cruises, Royal Caribbean's joint venture partner. TUI disclosed a 12% increase in vessel capacity and a 2% improvement in per-day pricing for the quarter ending in September. Goldman Sachs has also maintained its Buy rating with a $360 price target on Royal Caribbean shares.

Taken together, the published price targets on Royal Caribbean now span from Deutsche Bank's $299 to Tigress Financial's $425, with every objective sitting above Monday's $242.43 close — a consolidated snapshot of where sell-side valuations stand relative to the current share price as the sector turns its attention to Carnival's numbers.