A strong year and outlook for the cruise industry has Goldman Sachs predicting more earnings for Norwegian Cruise Line Holdings in 2025. She also raised her price target to $35 from $29, indicating a 34.8% upside from Monday’s closing price. Norwegian Cruise Line shares have soared 51% so far this year, while the S&P 500 has gained 26.9%. Still, Dove said the stock’s valuation remains well below pre-COVID levels. NCLH .SPX YTD Peak NCLH vs. SPX 2024 “We believe the business is better today and needs a higher P/E ratio to start closing the gap with RCL,” Dove wrote in a research note on Tuesday. Dove added that the development momentum of the cruise industry will continue, with the number of new passengers increasing by more than 10% annually. Analysts added that demand remains higher than supply, giving cruise lines pricing power. “Ultimately, we think every cruise stock will perform this year for different reasons, so we upgrade NCLH to Buy,” Dove said. To be sure, there are some risks to Dove’s outlook. “Significant increases in supply in the short term could undermine NCLH’s pricing power. Continued increases in bunker fuel prices and general volatility could reduce NCLH’s ability to improve margins and meet financial obligations,” she said. Shares of Norwegian Cruise Line rose more than 3% during premarket trading Tuesday. Analysts are generally bullish on the stock. London Stock Exchange Group (LSEG) data shows that 12 of 22 analysts covering the airline rate it a buy or strong buy. The average analyst price target also implies an upside of more than 11%.
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