Norwegian Cruise Line stock initiated with Buy rating at TD Cowen

Investing.com - TD Cowen initiated coverage on Norwegian Cruise Line Holdings (NYSE:NCLH) with a Buy rating and a $31.00 price target on Tuesday. The target sits within the broader analyst range of $18-$36, with InvestingPro data showing the stock currently trades at $23.19 and a P/E ratio of 12.

The research firm believes Norwegian Cruise Line has been "unduly punished" for yield headwinds experienced this year, which included weak first-quarter performance related to drydock repositionings.

Norwegian Cruise Line previously lowered its fiscal year 2025 yield guidance to 2-3% from 3% during its last earnings call, citing soft U.S. bookings for European cruises during the third quarter amid tariff uncertainty in March and April.

TD Cowen views these challenges as temporary and notes the cruise operator has implemented course corrections for next year, including shorter European sailings and more Caribbean cruises in its itinerary mix.

The firm projects yield reacceleration to more than 4% in the fourth quarter of 2025 and 3.6% in 2026, while estimating that recent charter deals will boost 2027-2028 yield by approximately 100 basis points per year.

In other recent news, Norwegian Cruise Line Holdings has expanded its senior secured revolving credit facility from $1.7 billion to $2.486 billion, maintaining the original terms and 2030 maturity date. This move aims to enhance liquidity and financial flexibility as the company pursues strategic initiatives. On the earnings front, analysts from BofA Securities have revised their earnings per share forecasts for Norwegian Cruise Line Holdings downward by 3% for 2025 and 2% for 2026, citing booking volatility and a softening forward booked position. Meanwhile, Goldman Sachs has adjusted its price target for the company to $18 from $20, while maintaining a Buy rating, noting challenges such as modest growth in the luxury segment and earlier occupancy reductions.

Mizuho (NYSE:MFG) has reiterated an Outperform rating on Norwegian Cruise Line, with a price target of $26. The firm highlights potential yield improvements and cost management that could benefit the company in 2026. Stifel also maintains a Buy rating with a $26 price target, expressing optimism about current booking trends and demand stability. Despite these positive outlooks, Norwegian Cruise Line has acknowledged a decline in future bookings, a concern also noted by BofA Securities. This series of developments reflects a mixed outlook for the company, with some analysts maintaining positive ratings while others express caution due to industry-wide headwinds.

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