BofA cuts Norwegian Cruise Line stock target to $26 from $29

Published 07/03/2025, 12:12
BofA cuts Norwegian Cruise Line stock target to $26 from $29

On Friday, BofA Securities analyst Andrew Didora adjusted the price target for Norwegian Cruise Line Holdings (NYSE:NCLH) to $26.00, down from the previous $26.00, while maintaining a Neutral stock rating. This revision follows the company’s fourth-quarter earnings release on February 27, where Norwegian Cruise Line reported earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $0.26 and $468 million, respectively. These figures surpassed BofA’s projections of $0.10 EPS and $445 million EBITDA. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period, with analyst consensus maintaining a moderately bullish stance.

Looking ahead, Norwegian Cruise Line offered guidance for 2025 EBITDA at $2,720 million, which is slightly below the consensus estimate of $2,760 million. In response to the company’s financial results and future guidance, BofA increased its 2025 EPS/EBITDA forecasts for Norwegian Cruise Line to $2.08 and $2,728 million, up from $2.01 and $2,664 million. The company has demonstrated solid performance with a revenue growth of 10.87% in the last twelve months and maintains a healthy gross profit margin of 40%.

For 2026, BofA’s new EPS forecast for the cruise operator is set at $2.55, a slight decrease from the previous $2.56 estimate. This forecast is 4% higher than the company’s investor day target of $2.45 but remains just under the broader market expectation of $2.63. The adjustment in the price target to $26 reflects modestly higher net debt assumptions.

The valuation continues to be anchored to 10.5 times BofA’s 2025 EBITDA estimates. The firm reiterated its Neutral rating, citing leverage and broader macroeconomic concerns as reasons for the cautious stance on Norwegian Cruise Line stock.

In other recent news, Norwegian Cruise Line Holdings reported a strong performance in the fourth quarter of 2024, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $0.26, significantly higher than the forecasted $0.11, while maintaining revenue at $2.1 billion, in line with projections. This marked a record year for Norwegian Cruise Line, with notable revenue and net yield growth of 10% and an adjusted EBITDA margin expansion of nearly 500 basis points. Stifel analysts have responded positively, raising their price target for Norwegian Cruise Line to $36 from $35, while maintaining a Buy rating, reflecting optimism about the company’s future performance. The analysts highlighted a projected 4.5% increase in per diems over the last three quarters of 2025 and a favorable spread between yields and costs. Looking ahead, Norwegian Cruise Line anticipates a full-year net yield growth of 3% for 2025, supported by strategic initiatives like new ship launches and partnerships. The company’s earnings potential remains promising, with projections suggesting EPS could exceed $3 by 2026, based on current guidance and performance metrics.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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