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Buy Norwegian Cruise Stock before Vacationing Restarts


Jun. 9 2020, Published 9:45 a.m. ET

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.”

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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%.

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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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