On Wednesday, Norwegian Cruise Line Holdings (NASDAQ:NCLH) stock fell 8.4% and closed at $19.20. The stock fell after the company announced that it extended the suspension of global voyages until September 30 across its Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. Previously, the global cruise company suspended cruise departures through the end of July amid the coronavirus pandemic.
In a press release, Norwegian said, “The voyage cancellations exclude September Seattle-based Alaska voyages. The Company is also cancelling select voyages through October 2020, including Canada and New England sailings, due to travel and port restrictions. The Company will continue to work in tandem with the U.S. Centers for Disease Control and Prevention, the federal government and global public health authorities to take all necessary precautions to ensure the health, safety and security of guests, crew and the communities visited.”
Carnival (NYSE:CCL) and Royal Caribbean Cruises (NYSE:RCL) are also expected to suspend most voyages through September amid fears about the second wave of infections. On Wednesday, Carnival and Royal Caribbean stocks fell 6.5% and 7.2%, respectively.
Growth projections for Norwegian Cruise
On a reported basis, Norwegian Cruise reported a net loss per share of $8.80 in the first quarter of 2020 compared to a net income per share of $0.54 in the first quarter of 2019. Excluding the impact of one-time items, the company reported a net loss per share of $0.99 in the first quarter compared to a net income per share of $0.83 in the same period last year. The adjusted EPS missed Wall Street’s expectation of -$0.50 for the first quarter of 2020. Norwegian Cruise’s first-quarter revenue fell 11.2% YoY (year-over-year) to $1.25 billion. The revenue met analysts’ estimate of $1.25 billion.
For the second quarter, Wall Street analysts expect a 98.4% fall in the revenue to $27.1 million from $1.66 billion in the second quarter of 2019. For fiscal 2020, analysts expect a 72.2% fall in the revenue to $1.79 billion from $6.46 billion in 2019. Analysts hope that the fiscal 2021 revenue will rise to $4.28 billion.
Analysts also hope that the second-quarter adjusted EPS will be lower at -$2.17 compared to $1.30 in the second quarter of 2019. For fiscal 2020, the adjusted EPS could decrease to -$6.49 from $5.09 in 2019. Analysts also hope that the fiscal 2021 adjusted EPS will rise to -$1.96.
Analysts’ recommendations and target price
Wall Street analysts continue to recommend a “buy” rating for Norwegian Cruise stock despite the company’s lower-than-expected financial performance. Among the 19 analysts tracking Norwegian Cruise, seven recommend a “hold,” 11 recommend a “buy,” and one recommends a “sell.” The consensus target price of $17.04 per share implies a downside of 11.3% based on Norwegian Cruise’s closing price of $19.20 on Wednesday.
Norwegian Cruise stock has returned -63.8% in the last 12 months and 75.8% in the last month. The stock is trading 173.1% above its 52-week low of $7.03 and 67.9% below its 52-week high of $59.78.
On Wednesday, Norwegian Cruise stock was trading 3.7% above its 20-day moving average of $18.51. Meanwhile, the stock is trading 30.8% above its 50-day moving average of $14.68 and 17.9% below its 100-day moving average of $23.38. The stock’s 14-day relative strength index score of 53 indicates that it isn’t oversold or overbought.
Norwegian Cruise stock fell 4.7% in the pre-market trading session today at 7:40 AM ET. At the same time, Carnival and Royal Caribbean stocks fell 6.7% and 3.5%, respectively. Carnival and Royal Caribbean’s target prices suggest potential returns of -4.7% and 12.2%, respectively.
To learn more, read Why Is Norwegian Cruise Stock Falling Today? and Buy Norwegian Cruise Stock before Vacationing Restarts.