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Buy Norwegian Cruise Stock before Vacationing Restarts

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On Monday, Norwegian Cruise Line Holdings (NASDAQ:NCLH) stock rose 19.8% and closed at $26.86. The shares rose after a higher-than-expected jobs report on June 5. The lockdowns have been easing in different economies. Also, the demand has started to improve.

According to a MarketWatch report, “The unemployment rate declined to 13.3% in May from 14.7% in April, while the labor participation rate increased, with 2.5 million nonfarm jobs being added to the economy. Economists polled by MarketWatch had expected the unemployment rate to climb to 19%.” The report added, “President Trump hailed the good news, predicting we’re going to be back higher next year than ever before.”

Q1 performance

In the first quarter of fiscal 2020, which ended in March, Norwegian Cruise delivered revenue of $1.25 billion—a decrease of 11.2% YoY (year-over-year). Wall Street expected revenue of $1.25 billion. The company posted an adjusted EPS of -$0.99, which missed the consensus estimate of -$0.50.

Wall Street analysts expect Norwegian Cruise to report a non-GAAP EPS of -$2.18 on revenue of $27.1 million in the second quarter. Analysts also expect the company’s sales to fall by 72.1% YoY in 2020 to $1.81 billion. The sales could rise to $4.24 billion in 2021. Meanwhile, the non-GAAP EPS will fall from $5.09 in 2019 to -$6.44 in 2020. Analysts expect a non-GAAP EPS of -$1.98 in 2021.

Analysts’ recommendations for Norwegian Cruise

Among the 19 analysts following Norwegian Cruise stock, 11 recommend a “buy,” seven recommend a “hold,” and one recommends a “sell.” Wall Street analysts have an average target price of $17.04 on Norwegian Cruise. The target price implies a return of -36.6% based on the closing price of $26.86 on Monday. The consensus target price for the stock has fallen from $28.88 in May—a fall of 41%.

Stock returns

Norwegian Cruise stock has returned -48.9% in the last 12 months and 116.1% in the last month. The stock is trading 282.1% above its 52-week low of $7.03 and 55.1% below its 52-week high of $59.78.

On Monday, Norwegian Cruise stock was trading 74.5% above its 20-day moving average of $15.39. Meanwhile, the stock is trading 103.2% above its 50-day moving average of $13.22 and 3.3% above its 100-day moving average of $26.01. The stock’s 14-day relative strength index score of 79 suggests that it’s overbought.

Norwegian Cruise stock has a middle Bollinger Band level of $15.39, while its lower Bollinger Band level is $7.09. On Monday, the stock closed near its upper Bollinger Band level of $23.68, which suggests that it’s overbought.

On Monday, Carnival Corp (NYSE:CCL) and Royal Caribbean Cruises (NYSE:RCL) stocks returned 15.8% and 8.2%, respectively. In the first quarter fiscal 2020 (quarter ended February), Carnival reported an adjusted EPS of $0.22 compared to $0.49 in the second quarter of fiscal 2019. The adjusted EPS missed analysts’ consensus estimate of $0.26. Carnival generated sales of $4.8 billion—a growth of 2.5% from the second quarter of fiscal 2019. The cruise operator beat analysts’ consensus revenue estimate of $4.68 billion. Read Why Carnival Stock Might Be a Smart Long-Term Buy to learn more.

Today at 6:11 AM ET, Norwegian Cruise stock fell 4.3% to $25.70 in the pre-market session. At the same time, the S&P 500 futures fell 1.0%, while the Dow futures fell 1.2%.

Read Can You Still Get a Piece of Norwegian Cruise Line Stock? to learn more.

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