Norwegian Cruise Line Eyes Record Earnings Amid Steady Growth
Norwegian Cruise Line Holdings Ltd. (NCLH), headquartered in Miami, Florida, is a prominent player in the cruise industry, operating three brands: Oceania Cruises, Regent Seven Seas Cruises, and Norwegian Cruise Line. Currently valued at about $10 billion, the company provides cruise itineraries that range from three to 180 days, visiting various ports around the globe. The company is set to release its fiscal Q3 earnings results just before the market opens on Thursday, Oct. 31.
Expectations for Strong Earnings Performance
As the earnings announcement approaches, analysts predict that NCLH will report an earnings per share (EPS) of $0.88. This marks a 23.9% increase compared to $0.71 in the same quarter last year. Over the past four quarters, the cruise line has exceeded Wall Street’s earnings expectations three times, with one miss. In its most recent quarter, NCLH achieved adjusted earnings of $0.40 per share, beating consensus estimates by 16.7%, and reflecting a 33.3% year-over-year increase. This impressive performance can be attributed to strong market demand and effective cost control measures.
Future Projections Look Bright
Looking ahead to fiscal 2024, analysts anticipate NCLH will post an EPS of $1.38, a remarkable increase of 228.6% from last year’s figure of $0.42. Additionally, the EPS is expected to rise by 19.6% year-over-year to $1.65 in fiscal 2025.
Stock Performance Overview
NCLH shares have risen by 15.9% year-to-date, which falls short of the S&P 500 Index’s ($SPX) 21.8% gain but outshines the Consumer Discretionary Select Sector SPDR Fund’s (XLY) nearly 12% return during the same period.
Recent Developments and Analyst Ratings
On Oct. 9, shares of NCLH surged by 10.9% after Citi analyst James Hardiman upgraded the stock from “Neutral” to “Buy” and raised the price target from $20 to $30. This upgrade reflected a growing confidence in the company’s commitment to efficient cost management. However, the stock experienced a downturn, losing ground for four consecutive trading days following the release of its Q2 earnings on Jul. 31. Despite posting strong performance metrics, including revenue of $2.37 billion (an 8% increase from a year prior), the stock trend did not align with expectations. The company also raised its full-year EPS guidance to $1.53.
Analysts maintain a cautiously optimistic outlook on Norwegian Cruise Line’s stock, reflected in a “Moderate Buy” consensus rating. Out of 17 analysts covering NCLH, eight recommend a “Strong Buy,” eight indicate a “Hold,” and one suggests a “Strong Sell.” Notably, this sentiment has shifted positively compared to three months ago, when only seven analysts recommended a “Strong Buy.”
Analyst Targets and Market Insights
The average analyst price target for NCLH stands at $24.47, suggesting a potential upside of 5.4% from its current trading levels.
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On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
