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3 Cruise Line Stocks Promising Near-Term Growth: RCL, CCL, NCLH

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The cruise industry is benefiting from strong demand and increased booking volumes. Solid bookings concerning North American and European sailings are driving the space. Also, strong pricing (on closer-in-demand) and solid onboard spending bode well for the industry.

At this stage, it will be prudent to invest in cruise line operators with a favorable Zacks Rank. A few such operators have strong upside left. Three among them are Royal Caribbean Cruises Ltd. (RCL - Free Report) , Carnival Corp. & plc (CCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) . 

Strong Demand for Cruise Liners

According to the Cruise Lines International Association (CLIA), the number of passengers embarking on cruises is projected to reach 35.7 million in 2024, suggesting an increase from 31.5 million in 2023. The projection calls for a 6% rise from the 2019 figures, reflecting the cruising industry’s upside.

Cruise operators are investing in new hardware, including mega-ships and private destinations, to acquire new customers. J.P. Morgan (JPM - Free Report) Research estimates the cruise industry to capture approximately 3.8% of the $1.9 trillion global vacation market by 2028.

3 Top Cruise Line Stock Picks

We have narrowed our search to three big cruise liners that have strong potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks currently carries a Zacks Rank # 1 (Strong Buy) and 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the share price performance of our five picks in the past three months.

Zacks Investment Research
Image Source: Zacks Investment Research

Solid Earnings Estimate Revisions for RCL Stock

Royal Caribbean Cruises Ltd. posted impressive second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. RCL has been benefiting from strong cruising demand from new and loyal guests and robust booking trends. Also, strength in consumer spending onboard and pre-cruise purchases bodes well. 

RCL emphasized investing in a modern digital travel platform to streamline the vacation booking process for customers and expand wallet share. Moreover, RCL emphasized new innovative ships and onboard experiences to boost its offering and deliver superior yields and margins.

Zacks Rank #1 Royal Caribbean Cruises has an expected revenue and earnings growth rate of 18.1% and 69.9%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, current year and next year in the last 30 days.

Zacks Investment Research
Image Source: Zacks Investment Research

Strong Price Upside for RCL Shares

In the past three months, RCL shares provided a return of 9.2%. The average price target of brokerage firms represents an increase of 14.2% from the last closing price of $162.05. The brokerage target price is currently in the range of $154-$210.

 

CCL Shares See Solid Earnings Estimate Revisions 

Carnival Corp. & plc reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. This was driven by sustained demand strength and increased booking volumes at significantly higher prices. CCL reported strong booking momentum for 2025, with record volumes surpassing the 2024 levels in price and occupancy. 

CCL’s focus on marketing campaigns and fleet-optimization efforts, along with fleet expansion initiatives is encouraging. Given the uptrend, CCL raised its fiscal 2024 adjusted EPS expectations to $1.18 from the previous expectation of $0.98.

Zacks Rank #2 Carnival has an expected revenue and earnings growth rate of 15% and more than 100%, respectively, for the current year (ending November 2024). The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 60 days.

Zacks Investment Research
Image Source: Zacks Investment Research

In the past three months, CCL shares provided a return of 9.6%. The average price target of brokerage firms represents an increase of 36.5% from the last closing price of $16.60. The brokerage target stock price is currently in the range of $15-$27.

NCLH Stock Earnings Surpass Expectations

Norwegian Cruise Line Holdings Ltd. reported solid second-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. NCLH is benefiting from strong demand, high pricing and increased booking volumes, leading to record advance ticket sales. 

NCLH’s focus on fleet expansion efforts and digital initiatives bodes well. These factors showcase that the company’s strategy is well-aligned with its growth goals and 2026 financial and sustainability targets. Given the substantial progress made so far and current demand expectations, NCLH raised its 2024 full-year guidance.

Zacks Rank #1 Norwegian Cruise Line has an expected revenue and earnings growth rate of 9.8% and more than 100%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 30 days.

Zacks Investment Research
Image Source: Zacks Investment Research

In the past three months, NCLH stock provided a return of 9.1%. The average share price target of brokerage firms represents an increase of 28.7% from the last closing price of $17.45. The brokerage target stock price is currently in the range of $17.50-$32.

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