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The cruise line sector had another strong day on Monday with Carnival Corporation (CCL) +4.35%, Royal Caribbean Cruises (NYSE:RCL) +2.05% and Norwegian Cruise Line Holdings (NCLH) +0.55% all extending on last week's rally.
Morgan Stanley updated that agents in a survey conducted by the firm noted a continuation of the strong momentum seen in Wave Season, with bookings up month-on-month and also higher compared to the pre-pandemic level in 2019.
"The large value gap between a cruise and land-based vacation continues to be cited as a tailwind, and others see the booking window continuing to lengthen as customers book further in advance. However, several other agents observe weaker bookings vs the comparative period in 2019, with possible reasons given including the less aggressive promotional environment and some ongoing wariness about travelling on a large cruise ship," noted analyst Jamie Rollo.
The firm is incrementally more bullish on Royal Caribbean (RCL) on its view the cruise line operator will continue to outperform peers on both top and bottom line. Morgan Stanley lifted its FY23 EBITDA forecast on RCL by 10%, while trimming the EBITDA forecast on NCLH and CCL by 1%. The price target on RCL was pushed up to $70 from $60.
For the year, Royal Caribbean (RCL) is up 57%, Carnival Corporation (CCL) is 31% higher, and Norwegian Cruise Line Holdings (NCLH) has racked up a 19% gain.