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Norwegian Cruise Line Holdings Ltd. (NCLH), headquartered in Miami, Florida, provides cruise travel services. Valued at $12.2 billion by market cap, the company offers cruise itineraries and theme cruises, and markets its services through various distribution channels including retail and travel agents, international and incentive sales, and consumer direct.
Shares of this leading cruise operator have outperformed the broader market considerably over the past year. NCLH has gained 111.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.5%. In 2024, NCLH stock is up 39.1%, surpassing the SPX’s 25.5% rise on a YTD basis.
Zooming in further, NCLH’s outperformance looks less pronounced compared to the Defiance Hotel, Airline, and Cruise ETF (CRUZ). The exchange-traded fund has gained about 44.6% over the past year. Moreover, NCLH’s gains on a YTD basis outshine the ETF’s 22.7% returns over the same time frame.
NCLH has been outperforming due to its recently announced "Charting the Course" plan, which focuses on investing in its culture, guest experiences, and operational efficiency. Investors have responded positively to the news, as the cruise industry sees a surge in demand for sea vacations. Norwegian Cruise Line's emphasis on finding a balance between managing expenses and pricing power has been well-received. Additionally, the company is investing $150 million to build a two-ship pier at its private island, Great Stirrup Cay, in order to accommodate a higher number of visitors by 2026.
On Oct. 31, NCLH shares closed up more than 6% after reporting its Q3 results. Its adjusted EPS of $0.99 topped Wall Street expectations of $0.95. The company’s revenue was $2.81 billion, exceeding Wall Street forecasts of $2.76 billion. NCLH expects full-year adjusted EPS to be $1.65.
For the current fiscal year, ending in December, analysts expect NCLH’s EPS to grow 290.5% to $1.64 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 17 analysts covering NCLH stock, the consensus is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, eight “Holds,” and one “Strong Sell.”
This configuration is more bullish than two months ago, with seven analysts suggesting a “Strong Buy.”
On Nov. 12, Morgan Stanley (MS) kept an “Underweight” rating and raised the price target on NCLH to $26.
While NCLH currently trades above its mean price target of $27.72, the Street-high price target of $32 suggests an upside potential of 14.8%.
On the date of publication, Neha Panjwani 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.
