Market Overview

Why BofA Expects Norwegian, Royal Caribbean To Restart Cruises In Q4, Stage Near-Complete Rebound In 2021

Why BofA Expects Norwegian, Royal Caribbean To Restart Cruises In Q4, Stage Near-Complete Rebound In 2021

Cruise companies Royal Caribbean Cruises (NYSE: RCL) and Norwegian Cruise Line Holdings (NYSE: NCLH) are inching toward a resumption of U.S. services after submitting a joint plan to the Centers for Disease Control, according to BofA Securities. 

The Cruise Line Analyst: Andrew Didora maintains an Underperform rating on Royal Caribbean with an unchanged $34 price target.

The analyst also maintains a Neutral rating on Norwegian Cruise with an unchanged $16 price target.

The Cruise Line Takeaways: Royal Caribbean and Norwegian's joint "Healthy Sail Panel" informed the CDC of its new safety standard strategy, marking the first step toward a resumption of U.S. cruises, Didora said in a Tuesday note. 

The document includes 74 health and safety measures that cover screening, onboard sanitation, destination planning and more, the analyst said.

Each consumer will need to confirm a negative COVID-19 test reading that was taken within five days of the cruise's departure, he said. 

If approved, cruises could sail from the U.S. in an "extremely limited form at some point" in the fourth quarter, Didora said.

The momentum should pick up in 2021, and both cruise operators should return to 85% of normal capacity levels by the end of 2021, the analyst said. 

Occupancy levels were left out of the Healthy Sail Panel's document beyond vague commentary on distancing guests from each other, he said, adding that the two cruise lines will need to submit company-specific safety plans to the CDC.

As a reference, Norwegian Cruise's management has already said it can break even on a shop-level basis at 40% of normalized levels, while EBITDA break-even requires 60% of normal net revenues, according to BofA. 

NCLH, RCL Price Action: Shares of Royal Caribbean were trading higher by 0.99% at $61.31 at last check Tuesday, while shares of Norwegian were up 0.13% at $15.01. 

Related Links:

Is Carnival's Stock A Buy After Resumption Of Cruises?

Norwegian Announces Pricing Of Its $250M Public Offering

Latest Ratings for NCLH

Sep 2020BarclaysUpgradesEqual-WeightOverweight
Aug 2020Morgan StanleyMaintainsUnderweight
Jul 2020SunTrust Robinson HumphreyDowngradesBuyHold

View More Analyst Ratings for NCLH
View the Latest Analyst Ratings


Related Articles (RCL + NCLH)

View Comments and Join the Discussion!

Posted-In: Andrew Didora BofA SecuritiesAnalyst Color Price Target Reiteration Travel Analyst Ratings General Best of Benzinga

Latest Ratings

SPOTDeutsche BankMaintains250.0
AMZNDeutsche BankMaintains4,050.0
DOCUBairdInitiates Coverage On280.0
ASOGuggenheimInitiates Coverage On17.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at