Royal Caribbean (RCL) stock picked up a double upgrade on Monday, as Deutsche Bank and Bank of America both lifted their ratings on the cruise operator to Buy — a vote of confidence that arrived just one day before rival Carnival's closely watched quarterly earnings report. A third firm, Tigress Financial Partners, also reaffirmed its bullish stance on the name.

Shares of Royal Caribbean slipped a fraction to $242.43 on Monday, a day after closing up 1.6% at $242.70 on Friday. The ratings moves come on the heels of a steep pullback: the stock has fallen 26% since August 5, is down about 13% for the year, and has slid below both its 50-day and 200-day moving averages — the technical levels chart watchers most often use to distinguish an uptrend from a downtrend.

Deutsche Bank and Bank of America Turn Bullish

The twin upgrades amount to a notable show of support during a difficult stretch for the shares. Deutsche Bank upgraded Royal Caribbean to Buy and kept its price target unchanged at $299, saying the recent decline gives investors a more attractive entry point than earlier in the year.

Bank of America analyst Andrew Didora moved his rating to Buy from Neutral and set a $330 price target, calling Royal Caribbean a "high quality business" in his note to clients. Both banks cited the stock's sharp slide since early August as the basis for an improved risk-to-reward setup.

What's Driving the Optimism

Didora pointed to the company's planned investment in Sandals Resorts as a key growth driver, estimating that the deal could add $900 million in EBITDA — a widely used proxy for operating profitability — by 2030.

"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 weighed in on Monday, reiterating its Buy rating and maintaining a $425 price target on the stock — the highest among the analysts mentioned here. The firm said the Sandals and Beaches partnership strengthens Royal Caribbean's position in global vacation spending, and that the recent pullback creates a long-term buying opportunity.

Tigress noted that RCL trades at a price-to-earnings ratio of 15.01 — a valuation yardstick that compares the share price to annual earnings — and currently looks undervalued against its fair value estimate, based on InvestingPro's analysis of the stock. The firm added that the Sandals deal brings in premium resort earnings at 10 times EBITDA, and it expects the tie-up to boost customer loyalty and lifetime guest spending over time.

Carnival Earnings Loom Over the Sector

Carnival (CCL) is set to report third-quarter results before the bell on Tuesday, in what amounts to a test for the entire cruise sector. Wall Street expects adjusted earnings of $1.35 a share, down from $1.43 a year ago, while revenue is forecast to grow 3% to $8.39 billion, according to FactSet. Carnival stock dipped 0.6% to $22.10 on Monday.

The cruise industry has endured a rough year. Higher fuel costs tied to the U.S. conflict with Iran, a hantavirus scare, and travelers staying closer to home have all weighed on results. Fuel prices remain the sector's biggest wildcard, with talks between the U.S. and Iran to end the conflict still unresolved.

Because Royal Caribbean and Carnival anchor the top of the industry, Carnival's release doubles as the sector's clearest near-term reference point: its forward guidance, booking commentary, and fuel-cost assumptions will give the first broad read on whether those pressures are easing. The print also serves as an early check on the upgraded theses — Didora's call rests in part on his view that "estimates seem reasonable."

Other cruise names also moved lower on Monday, with Norwegian Cruise Line (NCLH) and Viking Holdings (VIK) each dropping around 1.5%.

Wall Street's Broader Take on Royal Caribbean

The bullish calls extend beyond Monday's two upgrades, with several other analysts also having turned more positive on Royal Caribbean recently. JPMorgan raised its price target to $394 and maintained an Overweight rating, citing a positive yield outlook. Bernstein SocGen reiterated an Outperform rating with a $355 target.

UBS kept its Buy rating and $367 target after Royal Caribbean's joint venture partner, TUI Cruises, posted strong preliminary results. TUI reported a 12% jump in capacity and a 2% rise in daily rates for the September quarter. Goldman Sachs also reiterated its Buy rating, with a $360 price target on Royal Caribbean.

Taken together, the published targets span $299 to $425 — all set above Monday's level of $242.43. Royal Caribbean's own next quarterly report remains the fuller test of the bulls' case; until then, Carnival's numbers and the direction of fuel prices are the nearest sector datapoints to watch.