Image source: Norwegian Cruise Line.
Cruise lines pop after Citi raises price targets
Carnival (+7.8%), Royal Caribbean (+4.7%), and Norwegian Cruise Line (+10.1%) all traded higher after Citigroup updated share-price targets that reflect positive outlooks. The analyst is optimistic that the cruise-sector rally will continue into 2025 and beyond.
Norwegian Cruise Line gets upgraded to buy from neutral with its price target at Citi raised to $30 from $20. Citi projects 23% annual earnings growth over three years, which could reach 30% if Norwegian maintains a 2.5% yield/cost spread. Both scenarios point to strong earnings growth and expanded multiples.
Related: Analysts sail into new stock price targets for Royal Caribbean, Norwegian
Citi also raised price targets on Carnival and Royal Caribbean, to $28 from $25 and to $253 from $204, respectively, both with buy ratings.
The analyst added a “90-day positive catalyst watch” on Royal Caribbean shares. Citi expects Royal to unveil a new long-term plan in the next two quarters, likely with its Q3 or Q4 earnings report.
The firm also says Royal Caribbean can reach $20 a share in earnings.
“While this would be a bold target at first blush, we do not believe that the building blocks are overly optimistic,” the analyst tells investors.
Alphabet drops on Google monopoly ruling
Alphabet stock lost 2% as the Department of Justice is still considering a possible breakup of Google.
The DoJ is considering measures to restore competition, which could prevent Google from using products like Chrome, Play and Android to give its search engine an advantage.
Related: Analysts reset Alphabet stock price target before key September court event
The proposed remedies include contract and product non-discrimination requirements, data-sharing and interoperability rules, and structural changes, according to a filing on Tuesday.
“Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow,” the DoJ said.
Google said the Justice Department proposals could hurt consumers and businesses.
“Not only is AI a new industry, but it’s hard to think of a technology more important for America’s technological and economic leadership. Splitting off Chrome or Android would break them – and many other things,” Lee-Anne Mulholland, regulatory affairs chief at Google, said in a blog post on Wednesday, thefly.com reported.
Boeing falls after negotiations with union collapse
Boeing fell 2.6% after withdrawing a pay raise offer to 33,000 machinists who have been on strike since mid-September.
“The union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business. Given that position, further negotiations do not make sense at this point and our offer has been withdrawn, ” Stephanie Pope, CEO of Boeing Commercial Airplanes, said in a statement on Oct. 8.
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S&P Global Ratings said the stoppage would cost Boeing more than $1 billion per month, CNBC reported.
Wells Fargo expects increased pressure on Boeing to raise cash in the near term. “Assuming a similar break this time, there may be one more shot at getting a deal prior to earnings on October 23,” the firm notes, thefly.com reported. Wells Fargo has an underweight rating on the shares with a price target of $110.
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