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Research Alert: Rcl: Mexico Setback Threatens Key Growth Catalyst; Maintaining Hold Opinion

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Shares of RCL have fallen 9% WTD following reports that Mexican President Claudia Sheinbaum rejected the company's 'Perfect Day Mexico' project in Quintana Roo, citing environmental concerns. The news is particularly troubling given management's Q1 commentary suggesting ecological concerns had been resolved and construction of the roughly $1B project had resumed. Management projected 90% of Caribbean guests would visit a private destination by 2027, up from 70% currently. Perfect Day Mexico was central to this target and critical for capturing the high-growth Texas drive-to-cruise market. The rejection creates multiple risks, including unrecoverable sunk costs, the 90% penetration target now in jeopardy, and elevated risk for Royal Beach Club Cozumel, being in the same region. We maintain Hold as the 9% sell-off reflects the immediate bad news and current demand remains strong otherwise. However, we lower our price target by $28 to $262 (12x 2026E EBITDA, down from 13x) to account for increased execution risk.

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Research Alert: CFRA Maintains Hold Opinion On Shares Of Under Armour Inc.

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