US Cruise Stocks Break Out on Bullish Analyst Upgrades
Shares of Norwegian Cruise Line, Royal Caribbean, and Carnival Corp surged today following the release of Citigroup’s bullish sector outlook, which also saw analysts boost their ratings and price targets on the three US cruise stocks.
US cruise stocks soared on Wednesday after analysts at Citigroup issued a bullish outlook for the sector. Shares of Norwegian Cruise Line (NYSE: NCLH), Royal Caribbean (NYSE: RCL), and Carnival Corp (NYSE: CCL) all experienced sharp gains, thanks to upbeat predictions about future earnings and a renewed focus on cost management across the industry. Investors welcomed the optimistic analysis, with cruise operators riding a wave of growing demand for vacations at sea.
Norwegian Cruise Line Leads the Charge
The biggest gainer was Norwegian Cruise Line, which saw its stock jump by 11% following an upgrade from Citigroup, which shifted its rating from “neutral” to “buy.” The analysts also raised Norwegian’s price target from $20 to $30, citing the company’s new strategy focused on balancing costs and yields.
Norwegian recently unveiled its “Charting the Course” plan, which includes initiatives to invest in its culture, guest experiences, and overall operational efficiency. Citigroup analysts noted that Norwegian’s refined strategy positions it to capitalize on pricing power while keeping costs in check.
“Norwegian’s shift away from ‘quality at all costs’ toward a more measured approach can’t help but bear fruit,” said James Hardiman, an analyst at Citigroup.
This approach could result in a substantial earnings boost, with expectations of 23% annual growth over the next three years. Norwegian’s adjusted earnings are expected to hit $2.45 per share by 2026, representing a compound annual growth rate (CAGR) of over 30%.
Norwegian Cruise Line (NCLH) Stock Price Action and Chart
Shares of Norwegian Cruise Line (NYSE: NCLH) closed Wednesday’s trading session a $23.07, up 10.91% on the day.
YTD, NCLH stock has risen 25.93%.
View Norwegian Cruise Line Interactive Stock Chart on Barchart
Royal Caribbean Reaches New Heights
Royal Caribbean also saw its stock soar by 5%, reaching an all-time high of $263 per share. Citigroup hiked the company’s price target to $253 from $204, maintaining a “buy” rating. The firm placed Royal Caribbean on a 90-day positive catalyst watch, indicating that further gains could be on the horizon as the company prepares to unveil its long-term growth strategy, potentially dubbed “Vision 20/20.”
Citigroup forecasts that Royal Caribbean could achieve $20 per share in earnings by 2027, far exceeding current market expectations.
“While this would be a bold target at first blush, we do not believe that the building blocks are overly optimistic,” Citigroup analysts wrote in their note.
The company’s robust booking trends and focus on expanding capacity are key drivers of its strong performance. Analysts expect Royal Caribbean to grow its earnings at a 20% CAGR over the next several years, with the cruise line’s future growth driven by both rising demand and higher ticket prices.
Royal Caribbean (RCL) Stock Price Action and Chart
Shares of Royal Caribbean (NYSE: RCL) rose +5.26% today, closing the day at $193.03 per share.
YTD, RCL stock is up 60.67%.
View Royal Caribbean Interactive Stock Chart on Barchart
Carnival Gains Momentum
Carnival Corp, while trailing its competitors in terms of stock growth, still made significant strides. Shares of Carnival surged nearly 9%, buoyed by Citigroup’s decision to raise the stock’s price target to $28 from $25. Analysts expect the company to benefit from ongoing efforts to reduce its debt, which should support a 24% CAGR in earnings over the next three years.
“Carnival’s focus on long-term debt reduction is starting to pay off, and that will help fuel sustained growth moving forward,” Citi’s report highlighted.
While Carnival may not be growing as quickly as Norwegian or Royal Caribbean, its focus on cost-cutting and financial discipline is paying off. Citigroup analysts emphasized that Carnival’s long-term debt reduction efforts position it well to take advantage of the continued recovery in the travel and leisure sector.
Carnival Corp (CCL) Stock Price Action and Chart
Shares of Carnival Corp (NYSE: CCL) finished the day up 7.08% at $20.20 per share.
YTD, CCL stock has increased by 16.83%.
View Carnival Corp Interactive Stock Chart on Barchart
Strong Demand Fuels Optimism
Citigroup’s upbeat report reflects broader trends in the cruise industry, which has rebounded strongly after pandemic-related disruptions. The growing preference among consumers for experience-based travel, coupled with pent-up demand for cruises, has created a favorable environment for the major cruise lines.
September was one of the best months on record for cruise bookings, and early data for 2025 suggests that demand remains strong. Web traffic for cruise operators is consistently high, and pricing trends for future voyages are positive. This bodes well for the industry’s long-term growth, with Citigroup noting that the rally in cruise stocks “has real legs” going into 2025 and beyond.
Both Norwegian and Royal Caribbean are expected to expand their capacities by 6% annually over the next three years, contributing to steady revenue growth. As more consumers prioritize experiences over physical goods, cruise lines are poised to benefit from this shift in spending patterns.
Conclusion
The cruise industry is riding high on a wave of strong demand and strategic changes, with Norwegian Cruise Line, Royal Caribbean, and Carnival all showing significant stock gains after Citigroup’s analyst upgrade. Norwegian’s focus on balancing costs and pricing power, Royal Caribbean’s upcoming growth strategy, and Carnival’s debt-reduction efforts have all contributed to a bullish outlook for the sector.
As demand for sea-based vacations continues to grow, these cruise lines appear well-positioned for sustained success through 2025 and beyond. Investors will be watching closely to see if these companies can deliver on their ambitious growth targets, but for now, the future looks bright for the cruising industry.
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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
