Why is NCLH stock dropping?

Shares of cruise line stocks Carnival Corp. (CCL), Royal Caribbean (RCL), and Norwegian (NCLH) close lower on Tuesday as Morgan Stanley analysts slash their price targets, citing rising fuel costs in travel demand headwinds. Recently spun-off companies Vestis Corporation (VSTS), Veralto (VLTO), and WK Kellogg Co.



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Insatiable demand for cruise travel suggests a path to recovery for this vacation purveyor. After a difficult few years, Norwegian Cruise Line Holdings (NCLH -3.59%) looks to turn this ship around in 2023.

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Norwegian Cruise Line Holdings (NCLH) Norwegian plans to introduce eight more ships through 202721. In Q3 2022, total revenue reached $1.6 billion, still well below 2019 levels,22 but occupancy and onboard revenue grew significantly, pointing to Norwegian's strong recovery.

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Stocks . USA . Given the investment horizon of 90 days and your highly speculative risk level, our recommendation regarding Norwegian Cruise Line is 'Strong Buy'.

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The latest closing stock price for Norwegian Cruise Line Holdings as of November 13, 2023 is 13.10.
  • The all-time high Norwegian Cruise Line Holdings stock closing price was 63.76 on November 02, 2015.
  • The Norwegian Cruise Line Holdings 52-week high stock price is 22.75, which is 73.7% above the current share price.


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In the case of Norwegian Cruise Line Holdings, both the revenue per share (evident from the last five years' TTM data: 2019: 28.67; 2020: 21.68; 2021: 0.08; 2022: 5.74; 2023: 16.54; ) and the 5-year revenue growth rate (-32%) have been on a consistent downward trajectory.

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Full year 2023 Occupancy is expected to average 103.5%, consistent with prior guidance. As expected, Occupancy in the quarter is slightly lower than the second quarter of 2019, reflecting the Company's strategic shift to longer, more immersive itineraries.

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Generated total revenue of $2.5 billion, a record for the Company and up 33% compared to the same period in 2019, and GAAP net income of $345.9 million, or EPS of $0.71. Achieved Adjusted EBITDA of $752 million and Adjusted EPS of $0.76, exceeding guidance of $730 million and $0.70 respectively.

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Market pros have also been inching their price targets higher for Royal Caribbean and Norwegian. It's not a surprise. The revenge travel surge that helped lift most travel and tourism stocks in 2021 and 2022 is finally coming around to raise the water for cruise line stocks in 2023.

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With a lower price-to-sales ratio, better revenue gains last year, and less debt accumulation since 2019, Norwegian Cruise Line Holdings is the better buy in today's market.

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