Morgan Stanley is turning more optimistic on Royal Caribbean shares after going through a tough time during the pandemic. Analyst Jamie Rollo upgraded Cruise stock from underweight to equal weight, calling it the “best cruise operator” coming out of COVID. “RCL appears to be better positioned than its peers, it has recovered occupancies faster, and its better cost controls have led to a faster recovery in EBITDA (excluding fuel) versus peers,” Rollo said. To be sure, Morgan Stanley remains cautious on the industry going forward, with pricing power expected to recover slower than other travel sectors due to lingering Covid concerns and higher growth in industry supply. Rollo said promotional activity is also sustained in areas of weak demand. “Travel agent commentary continues to be mixed, with some agents reporting a good level of interest for 2023 itineraries and good momentum into the new year, and others reporting concerns about COVID/mask mandates following a surge in cases in China highlight, oversupply of inventory in the Caribbean, and continued economic/inflation concerns,” Rollo said. In conjunction with the upgrade, Rollo raised his price target on the stock to $50 from $40 per share. It is still about 13 per cent lower than Monday’s closing price. In the same note, Rollo downgraded shares of Norwegian Cruise Line from equal weight to underweight, citing difficulty in controlling costs relative to peers. An adjusted $11.50 price target from $13 per share means the stock is down about 17% from Monday’s close. Rollo also lowered the bank’s forecasts for Carnival, expecting another year of losses in 2023 for the cruise company. — CNBC’s Michael Bloom contributed reporting