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SMALL BUSINESS
Analyst raises Royal Caribbean to 'outperform'
AP
NEW YORK -Anticipated margin expansion and more stable financials led an analyst to upgrade cruise operator Royal Caribbean Cruises Ltd. on Wednesday.
Janet Brashear of Bernstein Research boosted the Miami-based company to "outperform" from "underperform" and increased its price target to $23 from $11.
The analyst expects cost cuts and the likelihood of more efficient ships to help Royal Caribbean improve margins.
Brashear said in a client note that new vessels are anticipated "to be more efficient in terms of fuel usage by 30 percent to 60 percent."
The analyst also says Royal Caribbean will be bolstered by improved financials. The company has indicated that it won't need more capital before 2011. Although Bernstein points out that it had $6.8 billion in total debt as of June 30, the analyst said she believes "operating cash flow will be sufficient to fund the maturity needs."
Shares of Royal Caribbean added 64 cents, or 3.8 percent, to $17.48 in morning trading. The stock has traded in a range of $5.40 to $29.90 over the last year.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2009-08-19 10:02:12
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