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Norwegian Cruise Stock Up 17% in a Month: Should You Dive in?
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Norwegian Cruise Line Holdings Ltd.‘s (NCLH - Free Report) shares are showing signs of a strong comeback after a rocky six months with a 7.9% decline. In the past month, the stock has moved up 16.7% compared with the industry’s 13.3% increase and the S&P 500's 8.7% rise. The company’s recent momentum suggests a promising turnaround amid broader market gains.
As of Monday, the stock closed at $17.89, below its 52-week high of $21.73 but above its 52-week low of $12.71. In the same timeframe, other industry players have also registered notable gains. Royal Caribbean Cruises Ltd. (RCL - Free Report) rose 17.8%, Carnival Corporation & plc (CCL - Free Report) increased 14.6% and OneSpaWorld Holdings Limited (OSW - Free Report) moved up 5%.
Image Source: Zacks Investment Research
Technical indicators suggest continued strong performance for NCLH. The stock is trading above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in NCLH's financial health and prospects.
50-Day Moving Averages
Image Source: Zacks Investment Research
Factors Favoring NCLH Stock Surge
Strong booking continues to drive the company's performance. Robust bookings for European, Caribbean and Alaskan sailings, where much of the capacity was focused, drove the company’s second-quarter 2024 top line. The company is also benefiting from stronger-than-expected onboard revenues and last-minute bookings. Guests' continued interest in shore excursions and amenities, including specialty restaurants and communication services, enhanced by the ongoing implementation of Starlink across the fleet, bode well.
NCLH is enhancing the guest experience by investing in digital innovations and ROI-driven initiatives to boost satisfaction and operational efficiency. A key upgrade is the rapid deployment of Starlink high-speed Internet, already installed on half of its fleet since spring 2023, with full rollout expected by the end of 2024. The company is also improving pre-cruise planning and offering new digital tools across its brands.
During second-quarter 2024, the company demonstrated its commitment to sustainability by meeting its 2024 goal of equipping 50% of the fleet with shore power technology a year ahead of schedule. It aims to equip 70% of the fleet with this technology by 2025. The launch of shore power at Port Miami marked a significant milestone, making it the first major U.S. East Coast cruise port to offer shore power at five terminals, including Terminal B, the Pearl of Miami. The company achieved its goal of testing 20% of the fleet with biodiesel blends, with plans to expand testing to 40% by 2024.
Norwegian Cruise is actively working to grow its fleet, which currently consists of 32 ships. The company plans to add the last of its Allura Class ships under the Oceania Cruises brand, expected for delivery in 2025. NCLH has four Prima Class ships on order, including two methanol ready next-generation ships, with deliveries scheduled between 2025 and 2028.
The company expects to introduce 13 new ships under three new classes from 2025 through 2036. This includes four Oceania Cruises ships with deliveries planned from 2027 through 2031 and two Prestige Class Ships scheduled for 2026 and 2029.
Estimate Revision Favoring the NCLH Stock
Reflecting the positive sentiment around NCLH, the Zacks Consensus Estimate for earnings per share has seen upward revisions. In the past 30 days, analysts have raised their estimates for the current and next fiscal by 8.3% to $1.56 and 5.1% to $1.87 per share, respectively. These estimates indicate year-over-year growth rates of 122.9% and 19.7%, respectively.
Image Source: Zacks Investment Research
NCLH Trading at a Discount
The company is currently valued at a discount compared with the industry on a forward 12-month P/E basis. NCLH’s forward 12-month price-to-earnings ratio stands at 11.87, lower than the industry’s ratio of 15.59 and the S&P 500's ratio of 21.68.
Image Source: Zacks Investment Research
Conclusion
Investors might find NCLH appealing for their portfolios, given its current Zacks Rank #1 (Strong Buy) rating. NCLH stock is an attractive investment opportunity due to its strong recent performance, promising growth prospects and favorable valuation. Robust booking trends, particularly in key markets like Europe, the Caribbean and Alaska, bode well. Additionally, the company's plans to expand its fleet with new, modern ships, alongside upward revisions in earnings estimates indicating significant growth, highlight its positive outlook.
Image: Bigstock
Norwegian Cruise Stock Up 17% in a Month: Should You Dive in?
Norwegian Cruise Line Holdings Ltd.‘s (NCLH - Free Report) shares are showing signs of a strong comeback after a rocky six months with a 7.9% decline. In the past month, the stock has moved up 16.7% compared with the industry’s 13.3% increase and the S&P 500's 8.7% rise. The company’s recent momentum suggests a promising turnaround amid broader market gains.
As of Monday, the stock closed at $17.89, below its 52-week high of $21.73 but above its 52-week low of $12.71. In the same timeframe, other industry players have also registered notable gains. Royal Caribbean Cruises Ltd. (RCL - Free Report) rose 17.8%, Carnival Corporation & plc (CCL - Free Report) increased 14.6% and OneSpaWorld Holdings Limited (OSW - Free Report) moved up 5%.
Image Source: Zacks Investment Research
Technical indicators suggest continued strong performance for NCLH. The stock is trading above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in NCLH's financial health and prospects.
50-Day Moving Averages
Image Source: Zacks Investment Research
Factors Favoring NCLH Stock Surge
Strong booking continues to drive the company's performance. Robust bookings for European, Caribbean and Alaskan sailings, where much of the capacity was focused, drove the company’s second-quarter 2024 top line. The company is also benefiting from stronger-than-expected onboard revenues and last-minute bookings. Guests' continued interest in shore excursions and amenities, including specialty restaurants and communication services, enhanced by the ongoing implementation of Starlink across the fleet, bode well.
NCLH is enhancing the guest experience by investing in digital innovations and ROI-driven initiatives to boost satisfaction and operational efficiency. A key upgrade is the rapid deployment of Starlink high-speed Internet, already installed on half of its fleet since spring 2023, with full rollout expected by the end of 2024. The company is also improving pre-cruise planning and offering new digital tools across its brands.
During second-quarter 2024, the company demonstrated its commitment to sustainability by meeting its 2024 goal of equipping 50% of the fleet with shore power technology a year ahead of schedule. It aims to equip 70% of the fleet with this technology by 2025. The launch of shore power at Port Miami marked a significant milestone, making it the first major U.S. East Coast cruise port to offer shore power at five terminals, including Terminal B, the Pearl of Miami. The company achieved its goal of testing 20% of the fleet with biodiesel blends, with plans to expand testing to 40% by 2024.
Norwegian Cruise is actively working to grow its fleet, which currently consists of 32 ships. The company plans to add the last of its Allura Class ships under the Oceania Cruises brand, expected for delivery in 2025. NCLH has four Prima Class ships on order, including two methanol ready next-generation ships, with deliveries scheduled between 2025 and 2028.
The company expects to introduce 13 new ships under three new classes from 2025 through 2036. This includes four Oceania Cruises ships with deliveries planned from 2027 through 2031 and two Prestige Class Ships scheduled for 2026 and 2029.
Estimate Revision Favoring the NCLH Stock
Reflecting the positive sentiment around NCLH, the Zacks Consensus Estimate for earnings per share has seen upward revisions. In the past 30 days, analysts have raised their estimates for the current and next fiscal by 8.3% to $1.56 and 5.1% to $1.87 per share, respectively. These estimates indicate year-over-year growth rates of 122.9% and 19.7%, respectively.
Image Source: Zacks Investment Research
NCLH Trading at a Discount
The company is currently valued at a discount compared with the industry on a forward 12-month P/E basis. NCLH’s forward 12-month price-to-earnings ratio stands at 11.87, lower than the industry’s ratio of 15.59 and the S&P 500's ratio of 21.68.
Image Source: Zacks Investment Research
Conclusion
Investors might find NCLH appealing for their portfolios, given its current Zacks Rank #1 (Strong Buy) rating. NCLH stock is an attractive investment opportunity due to its strong recent performance, promising growth prospects and favorable valuation. Robust booking trends, particularly in key markets like Europe, the Caribbean and Alaska, bode well. Additionally, the company's plans to expand its fleet with new, modern ships, alongside upward revisions in earnings estimates indicating significant growth, highlight its positive outlook.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.