UPDATE: SunTrust Forecasts Calm Seas, Upgrades Royal Caribbean

In a report published Wednesday, SunTrust analyst C. Patrick Scholes upgraded Royal Caribbean Cruises Ltd. (NYSE: RCL) from Neutral to Buy and raised the price target from $54.00 to $63.00 based on strong pricing trends.

Scholes noted “very strong” forward pricing trends for Royal Caribbean and the share price trading at roughly 8 percent off its highs.

The analyst commented, “Survey results to-date suggest 3Q pricing could average +8.5% even if prices fall sequentially by 5% a month for the rest of the quarter, a conservative scenario given 2014 loads are running at 80%, up double-digit from last year. As a result we see implied back half guidance as very conservative and expect management to guide above the Street when it reports next in late July.”

SunTrust added that there is ample opportunity for onboard spending growth. The analyst reminded investors and the general public that Royal Caribbean is launching a new planning tool to allow customers to pre-book restaurants, entertainment, spa appointment and more.

Scholes raised 2014 and 2015 EPS estimates from $3.38 and $4.40 to $3.54 and $4.53, respectively.

Shares of Royal Caribbean Cruises closed at $51.93 on Tuesday and are currently trading up 2.7 percent at $53.33.