Seeking Alpha

Credit Suisse warns of dampened cruise pricing, prefers Royal to Carnival

  • Royal Caribbean Cruises (RCL -1.5%) shares dip after Credit Suisse issues a note seeing pricing pressure over the next year (with pricing down 5.2% Y/Y according to the firm's surveys). In the long run, analyst Joel Simpkins believes "the Quantum class vessels are truly differentiated and ... provide an opportunity for outsized yield growth mid-decade, assuming industry conditions (as well as the macro picture) improve further."
  • Simkins prefers Royal Caribbean to Carnival (CCL -1%) based on brand positioning, greater exposure to the North American market, lack of 2014 supply growth, and continued balance sheet shipwrighting.
  • Cruise mate Norwegian Cruise Line Holdings (NCLH -2.2%) is down in sympathy.
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