Truist Securities reiterates Buy rating on Norwegian Cruise Line stock

Published 30/07/2025, 16:20
Truist Securities reiterates Buy rating on Norwegian Cruise Line stock

Investing.com - Truist Securities has reiterated its Buy rating and $27.00 price target on Norwegian Cruise Line Holdings (NYSE:NCLH), citing a "real catch-up opportunity" with its private island enhancements. The cruise operator, currently valued at $10.5 billion, has seen analyst targets range from $18 to $36, with InvestingPro data showing six analysts recently revising earnings estimates upward.

The cruise line announced it will open a massive water park on Great Stirrup Cay next July, following the completion of a fixed pier later this year and other island amenities including a shore club opening in the first quarter of 2026. These investments come as the company maintains a significant debt position, with InvestingPro analysis indicating a debt-to-equity ratio of 10.45.

Truist Securities views these developments as making Norwegian a competitor in what it calls the "enhanced private island arms race," catching up to Royal Caribbean (NYSE:RCL)’s CocoCay (introduced in 2019) and Carnival (NYSE:CCL)’s recently opened Celebration Key.

The research firm identified Norwegian’s lack of an enhanced private island as one reason for its "sizable valuation discount to peers" and share underperformance within the cruise sector this year.

Truist Securities expects next year’s opening to serve as a "positive catalyst for earnings growth and possibly the valuation multiple," addressing what it considers a key factor in Norwegian’s earnings growth lagging behind competitors.

In other recent news, Norwegian Cruise Line Holdings has announced the expansion of its senior secured revolving credit facility from $1.7 billion to $2.49 billion, maintaining the original terms and a maturity date set for 2030. This move is expected to provide the company with additional liquidity and financial flexibility to support its strategic initiatives. Meanwhile, TD Cowen has initiated coverage of Norwegian Cruise Line stock with a Buy rating and a price target of $31.00, citing that the company has been "unduly punished" for yield headwinds earlier this year. Mizuho (NYSE:MFG) has reiterated its Outperform rating on the stock with a $26.00 price target, noting that any third-quarter weakness is expected to be temporary. Stifel also maintains a Buy rating with a $26.00 price target, highlighting optimism from company executives about current booking trends. Additionally, Norwegian Cruise Line has unveiled plans to build a six-acre waterpark at its private island, Great Stirrup Cay in the Bahamas, slated to open in summer 2026. The new "Great Tides Waterpark" will feature numerous attractions, including 19 waterslides and a unique cliffside jump experience. These developments mark significant strategic and operational steps for Norwegian Cruise Line Holdings.

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