Turnaround Imminent For Norwegian Cruises? 2 Analysts Share Takeaways From Investor Event

Shares of Norwegian Cruise Line Holdings NCLH jumped over 7% on Monday after the company hosted its “Charting the Course” investor event. Amid management’s upward revision of 2024 Adjusted EPS from $1.32 to $1.42, two analysts shared their takeaways of Norwegian’s ability to outperform Wall Street expectations.

The Norwegian Cruise Analysts:

• Stifel analyst Steven M. Wieczynski reiterated his Buy rating on Norwegian, raising his price target from $25 to $26.
• Goldman Sachs analyst Lizzie Dove maintained her Neutral rating on Norwegian and raised the price target from $19 to $21.

Stifel Analyst on Norwegian Cruise: Wieczynski insisted that Norwegian management’s guidance could still be conservative, particularly in the long term with cost savings. Norwegian’s 2026 EPS guidance is approximately $2.45.

“Bottom line is we think they are super-conservative and honestly we believe their 2026 adjusted EPS could be well above $3/share,” Wieczynski said. “Now a lot goes into that statement, but if the consumer stays somewhat healthy for the foreseeable future, we don't see a reason why these long-term targets won't be met and exceeded, very similar to long-range targets that Royal Caribbean Group RCL (RCL/Buy) has laid out in the past.”

Wieczynski also emphasized the ongoing strength of Norwegian’s fundamental operations as a reason to be optimistic.

“Revised 2024 guidance seems pretty fair to us, but we sense the market is going to speculate if this is as good as it gets for the company. In short, we would say absolutely not. Let's try and keep this simple. Bookings remain strong. Pricing remains strong. Onboard metrics remain strong. There is no slowdown in booking activity through early-2025,” said the analyst.

Goldman Analyst on Norwegian Cruise: Dove was less optimistic about Norwegian’s ability to outperform guidance in 2024, citing “geopolitical headwinds” in the short term. However, the analyst stated that the company will still experience future growth.

“NCLH's confidence on pricing, long-term LSD-MSD net yield growth and cruise category expansion further corroborates our view that 2024 is not "peak cruise" and there are several industry pricing/demand tailwinds still to come,” said Dove.

The analyst estimated a 2026 Adj EPS of $2.45, in line with management estimates. Dove also commented on potential cost savings.

“While we were encouraged by the cost savings plan, we would have liked a little more detail on the cadence and quantity of these savings, which leaves us a little below NCLH's long term EBITDA margin guidance pending further proof points and execution,” Dove said.

NCLH Price Action: NCLH traded at $16.97, up 0.18% on the day at the time of publication.

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