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Norwegian Cruise Line (NCLH) Laps the Stock Market: Here's Why

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The latest trading session saw Norwegian Cruise Line (NCLH - Free Report) ending at $20.99, denoting a +0.48% adjustment from its last day's close. The stock's performance was ahead of the S&P 500's daily gain of 0.28%. On the other hand, the Dow registered a gain of 0.15%, and the technology-centric Nasdaq increased by 0.15%.

Shares of the cruise operator have appreciated by 19.37% over the course of the past month, outperforming the Consumer Discretionary sector's gain of 3.2% and the S&P 500's gain of 2%.

Market participants will be closely following the financial results of Norwegian Cruise Line in its upcoming release. The company's earnings per share (EPS) are projected to be $0.94, reflecting a 23.68% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.75 billion, up 8.29% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $1.58 per share and a revenue of $9.38 billion, demonstrating changes of +125.71% and +9.77%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Norwegian Cruise Line. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.44% higher. Currently, Norwegian Cruise Line is carrying a Zacks Rank of #1 (Strong Buy).

With respect to valuation, Norwegian Cruise Line is currently being traded at a Forward P/E ratio of 13.21. This valuation marks a discount compared to its industry's average Forward P/E of 17.39.

Investors should also note that NCLH has a PEG ratio of 0.26 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Leisure and Recreation Services stocks are, on average, holding a PEG ratio of 1.04 based on yesterday's closing prices.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 152, finds itself in the bottom 40% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NCLH in the coming trading sessions, be sure to utilize Zacks.com.


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