Is Norwegian Cruise Line Holdings Ltd NYSE:NCLH A High Quality Stock To Own?

Table Of Content

• Norwegian Cruise Line Holdings to Hold Conference Call on Fourth Quarter and Full Year 2023 Financial Results
• NCLH Price Target - Frequently Asked Questions
• Norwegian Cruise Line CEO on why they are 'the biggest growth story' in the cruise sector
• Stock , NCLH
• Norwegian Cruise's stock jumps after guidance for a surprise profit for the current quarter

See our analysis on Norwegian Cruise Line Stock Chances Of Rise for more details on the stock’s recent performance and where it could be headed. We’d like to share more about how we work and what drives our day-to-day business. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams.

Norwegian Cruise Line Holdings to Hold Conference Call on Fourth Quarter and Full Year 2023 Financial Results

On the cost side, while higher oil prices and unfavorable foreign exchange could elevate costs at times, we expect management will focus on extracting further efficiencies as the business continues to scale. Over time, we expect both pricing and costs to normalize at low-single-digit rates. That said, the longer-term outlook for the company remains mixed, in our view. Booking trends have also been mixed, with reservations for the second half of 2021 apparently remaining below historical levels, although early trends for 2022 look strong, per the company. Norwegian has spent the better part of the last year raising funds via debt and equity issuances, with its debt load standing at about $11.8 billion at the end of Q4, up from about $6.8 billion a year ago. The higher interest costs are likely to weigh on the company’s profitability going forward.

NCLH Price Target - Frequently Asked Questions

Norwegian Cruise Line Holdings Ltd., together with its subsidiaries, operates as a cruise company in North America, Europe, the Asia-Pacific, and internationally. The company operates through the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Norwegian Cruise Line Holdings has a better ROE than the average (17%) in the Hospitality industry.

Norwegian Cruise Line CEO on why they are 'the biggest growth story' in the cruise sector

Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time. Now while cruising from the U.S. ports is set to resume this July, we still think that 2021 is likely to be a relatively slow year for Norwegian. Norwegian will likely miss out out on much of the lucrative summer cruising season and it’s also possible that older customers - who are a key demographic - will take a wait and watch approach to cruising post the pandemic. That said, 2022 is looking much stronger, with consensus estimates pointing to revenues of $6 billion, just slightly below the $6.5 billion in revenue the company posted in 2019.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. While Norwegian Cruise Line currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Coronavirus-induced changes in consumer behavior with regard to travel had altered the economic performance of Norwegian Cruise Line Holdings, affecting its ability to generate excess economic rents. However, as consumers returned to cruising after the 15-month sailing halt that ended in July 2021, they regained their appetite for travel, bolstered by the value proposition the holiday provides. With ships fully deployed at historical occupancy levels, pricing surpassed prepandemic levels in 2023, and pricing momentum has persisted into 2024. While Norwegian could intermittently see pricing competition in periods of macroeconomic distress, we believe its freestyle offering and attractive itineraries will keep passengers engaged with the brand.

Norwegian Cruise Line Holdings Ltd. (NCLH) is Attracting Investor Attention: Here is What You Should Know - Yahoo Finance

Norwegian Cruise Line Holdings Ltd. (NCLH) is Attracting Investor Attention: Here is What You Should Know.

Posted: Thu, 21 Mar 2024 07:00:00 GMT [source]

Norwegian Cruise's stock jumps after guidance for a surprise profit for the current quarter

According to 15 analysts, the average rating for NCLH stock is "Hold." The 12-month stock price forecast is $20.07, which is an increase of 9.73% from the latest price. Royal Caribbean saw its stock jump after posting narrower than expected fourth quarter losses and bookings earlier in February. Morgan Stanley had upgraded the rival company in January, naming it the "superior cruise operator" coming out of the pandemic.

Norwegian Cruise Stock Is Sailing Higher After Earnings. Demand Is at Record Levels.

This could also prove positive for the cruising business, as there could be some revival in demand from families. While Norwegian is likely to start cruises from the U.S. around early August, it says that it now plans to operate 23 of its 28 ships through early 2022. Moreover, the company said that it would begin cruising to Alaska from early August following the passage of the U.S. Alaska Tourism Restoration Act, which temporarily enables cruise ships to sail to Alaska, bypassing a legal requirement to make a stop at ports in Canada, which has banned cruses until 2022. Cruise companies had previously canceled their trips to Alaska, which is a popular summer cruising destination. Separately, the CDC also recently issued new guidelines easing mask-wearing requirements and social-distancing guidelines for fully vaccinated passengers on cruises.

Norwegian Cruise Line (NCLH) Stock Forecast & Price Target

The company spent the better part of the last year raising funds, with its debt load roughly doubling to $12 billion between December 2020 and the end of March 2020. This should lead to higher interest costs, constraining the company’s long-term profitability. Moreover, shareholders have also been significantly diluted by the company’s equity issuances, with shares outstanding rising to 370 million as of April 2021, up from 213 million in early 2020. Ticket prices have also apparently been strong, trending above 2019 levels.

However the stock is trading higher thanks to upbeat first-quarter guidance and a full-yea... This year's ‘wave season' will break revenue records for cruise lines, but investors are wary of the massive debts the industry took on during the pandemic. The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

Those are the big-picture trends that are meaningful to Norwegian's business. And because the trends are good, the company is guiding for better-than-expected financial results in the upcoming first quarter of 2024. Norwegian is also projecting full-year earnings per share of 70 cents in 2023, well below expectations of $1.04.

The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier. Try the Trefis machine learning engine above to see for yourself how Norwegian Cruise Line stock is likely to behave after any specific gain or loss over a period. Bear in mind, a high ROE doesn't always mean superior financial performance. A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk . Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.55 in profit. All of the cruise-ship companies incurred significant debt during the worst of the COVID-19 pandemic, including Norwegian.

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Although Norwegian’s higher levels of leverage (debt has doubled to $12 billion from pre-pandemic levels) are a concern, the stock could still be worth a look considering that it remains down by about 45% from its 2019 levels. The cruise company reported fourth quarter losses of $1.04 per share, more than analysts' estimates of 85 cents. The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks. IF NCLH stock moved by -5% over 5 trading days, THEN over the next 21 trading days, NCLH stock moves an average of 4.5%, with a 62.8% probability of a positive return over this period. A number of equities research analysts have recently commented on the company.

MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits. On its current trajectory, it will be able to meet its financial needs although it won't be without some dilution to shareholders. Some of its debt will convert to shares because of how it was arranged.