Miami-based Norwegian Cruise Ord (NCLH) is a prominent cruise line operator with a market cap of $6.9 billion. Established in 1966, the company offers a wide range of voyages under its Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands.
Shares of the cruise company have underperformed the broader market over the past year. NCLH has gained 22% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.2%. In 2024, Norwegian Cruise stock has declined by 19.7%, compared to $SPX’s 9.5% YTD rise.
Zooming in further, NCLH marginally outperforms the Defiance Hotel Airline and Cruise ETF (CRUZ), which has gained 19.8% over the past year. However, the exchange-traded fund rose 2.6% on a YTD basis, outshining NCLH’s double-digit decline over the same period.
NCLH's sluggish stock performance in 2024 and the past year can be linked to geopolitical tensions in the Middle East, resulting in canceled Red Sea itineraries. Most recently, on May 1, shares of NCLH plunged significantly after its Q1 earnings report despite beating analysts’ earnings estimates. Although the company reported strong sales growth and raised its full-year guidance, investors seemed disappointed with the magnitude of the increase.
For the current fiscal year, ending in December 2024, analysts expect NCLH’s EPS to rise 154.8% year over year to $1.07. Moreover, the company’s earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on one other occasion.
Norwegian Cruise’s stock has a consensus “Hold” rating overall. Out of 15 analysts covering the stock, three rate it as a "Strong Buy," 11 suggest a "Hold,” and one advises “Strong Sell.”
This configuration has been consistent over the past months.
Post Q1 earnings report, Susquehanna's Christopher Stathoulopoulos maintained a “Neutral” rating on the stock and slashed the price target to $18 per share from $21. Similarly, Wells Fargo’s Daniel Politzer retained his “Neutral” stance, reducing the price target to $19 from $21.
The mean price target of $20.53 suggests a 27.5% premium to NCLH from current levels. The Street-high target of $32 represents an impressive upside potential of 98.8%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
