Stifel reiterates Buy rating on Norwegian Cruise Line stock amid capital transactions

Investing.com - Norwegian Cruise Line Holdings (NYSE:NCLH) shares fell approximately 2% on Monday, despite Stifel reaffirming its Buy rating and $35.00 price target on the stock. The cruise operator, with a market capitalization of $11.3 billion, has shown strong momentum with a 51% return over the past year. According to InvestingPro data, the stock’s high beta of 2.2 indicates significant price sensitivity to market movements.

Stifel believes the market has misinterpreted the capital market transactions announced by Norwegian Cruise Line on Monday morning, noting that the sell-off occurred while the S&P 500 gained 0.4%.

The investment firm clarified that these transactions are positive for Norwegian Cruise Line as they do not increase the company’s diluted share count—actually lowering it—while also reducing overall borrowing costs.

Stifel recommends using the current weakness as a near-term buying opportunity for Norwegian Cruise Line stock.

The firm also noted that if Norwegian Cruise Line continues on its path toward meeting 2026 financial targets, which would lower leverage, the current significant valuation gap of approximately 40% relative to Royal Caribbean Group could narrow to around 20%, potentially resulting in material upside for Norwegian Cruise Line shares.

In other recent news, Norwegian Cruise Line Holdings reported its second quarter 2025 earnings, which showed a slight miss on both earnings per share and revenue compared to forecasts. The company’s EPS was $0.51, just below the expected $0.52, and revenue reached $2.52 billion, falling short of the anticipated $2.56 billion. Despite this, investor confidence remained strong. Additionally, Norwegian Cruise Line Holdings announced a $2.05 billion senior notes offering, planning to use the proceeds to manage existing debt. The company also launched a share offering to repurchase a portion of its subsidiary’s exchangeable senior notes. In the realm of analyst updates, Tigress Financial raised its price target for Norwegian Cruise Line to $38, maintaining a Strong Buy rating. Meanwhile, UBS increased its price target to $27, though it maintained a Neutral rating, expressing caution about future yield targets. These developments highlight the ongoing strategic efforts by Norwegian Cruise Line to strengthen its financial position and capitalize on market opportunities.

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