With US Cruise Ship Suspension Extended, Norwegian, Royal Caribbean Analyst Changes Targets

With US Cruise Ship Suspension Extended, Norwegian, Royal Caribbean Analyst Changes Targets

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Following an official extension of the suspension of cruise operations from U.S. ports, Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) and Royal Caribbean Cruises Ltd (NYSE: RCL) have halted nearly all cruises through September against&nbsp;expectations of an August resumption, according to BofA Securities.” data-reactid=”19″>Following an official extension of the suspension of cruise operations from U.S. ports, Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) and Royal Caribbean Cruises Ltd (NYSE: RCL) have halted nearly all cruises through September against expectations of an August resumption, according to BofA Securities.

The Cruise Lines Analyst

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="BofA’s Andrew Didora updated the estimates to reflect a phased-in recovery beginning in October. The analyst also rolled forward the price targets for cruise lines to 2022 estimates.” data-reactid=”21″>BofA’s Andrew Didora updated the estimates to reflect a phased-in recovery beginning in October. The analyst also rolled forward the price targets for cruise lines to 2022 estimates.

  • Didora maintained a Neutral rating on Norwegian Cruise Line Holdings with a price target lifted from $12.50 to $19.
  • Didora reiterated an Underperform rating on Royal Caribbean Cruises and raised the price target from $23 to $40.

The Cruise Lines Thesis

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Capacity for cruise lines is likely to remain at just 20% of fourth-quarter&nbsp;2019 levels and may recover to only 75% in 2021, Didora said in a Wednesday note. (See his track record here.)” data-reactid=”26″>Capacity for cruise lines is likely to remain at just 20% of fourth-quarter 2019 levels and may recover to only 75% in 2021, Didora said in a Wednesday note. (See his track record here.)

The analyst lowered 2020 earnings estimates:

  • From a loss of $7.12 per share to a loss of $7.39 per share for Norwegian Cruise Line Holdings. 
  • From a loss of $14.18 per share to a loss of $15.29 per share for Royal Caribbean Cruises. 

With the cruise industry not generating any revenue for six months this year, 2021 could be a transition year “as capacity and revenues likely ramp back up slowly throughout the year,” the analyst said. 

NCLH, RCL Price Action

Shares of both Norwegian Cruise Line were up 0.19% at $16.45 at the time of publication, while Royal Caribbean shares were higher by 1.01% at $50.82. 

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Latest Ratings for NCLH

Date Firm Action From To
Jun 2020 Barclays Downgrades Overweight Equal-Weight
Jun 2020 Redburn Downgrades Buy Neutral
Jun 2020 Morgan Stanley Reinstates Underweight

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="View More Analyst Ratings for NCLH
View the Latest Analyst Ratings” data-reactid=”40″>View More Analyst Ratings for NCLH
View the Latest Analyst Ratings

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