Norwegian Cruise Line Guidance 'Falls Short Of High Expectations': 4 Analysts Dive Into Q1 Earnings

Zinger Key Points
  • Norwegian Cruise Line Holdings reported higher-than-expected EBITDA and raised its FY EPS guidance from $1.23 to $1.32, one analyst said.
  • The company’s Q2 guidance is in-line with expectations and 2024 guidance raise is modest, another analyst added.

Shares of Norwegian Cruise Line Holdings Ltd NCLH continued to sink in early trading on Thursday, after the company reported its first-quarter results.

Here are some key analyst takeaways from the release.

  • Goldman Sachs analyst Lizzie Dove maintained a Neutral rating and price target of $19.
  • Bank of America Securities analyst Andrew Didora reaffirmed a Hold rating and price target of $20.
  • Truist Securities analyst Patrick Scholes reiterated a Hold rating and price target of $20.
  • JPMorgan analyst Matthew Boss maintained a Neutral rating on the stock.

Check out other analyst stock ratings.

Goldman Sachs: Management's guidance raise fell short of high expectations, Dove said in a note. "In an industry where demand is stronger than ever and expectations had increased into the print, a $50mn raise to ‘24 EBITDA guidance was not enough for NCLH today," she wrote.

Guidance reflects a deceleration in net per diem (net revenue per passenger cruise day) in the fourth quarter. That’s "the key negative," according to Dove.

The company raised its 2024 net yield guidance by about 100 basis points (bps). But, "this was not enough in our view, particularly as >half of this was flowing through the 1Q beat," she added.

BofA Securities: Norwegian Cruise Line reported EBITDA 1.3% higher than expected, and raised its full-year guidance on stronger yields, Didora said. The company raised its 2024 earnings guidance from $1.23 per share to $1.32 per share, he added.

"NCLH shares were weak on 1Q24 earnings despite guidance moving higher as expectations had meaningfully risen leading into the results," the analyst wrote. "NCLH’s 2Q24 outlook was well-aligned with consensus and did not reflect the upside," he further stated.

Truist Securities: The company's results were "slightly" higher than expected, "driven primarily by costs/margins as revenues, and specifically Passenger ticket revenue per passenger cruise day came at $239 vs. consensus of $248, were below consensus," Scholes wrote in a note.

The second-quarter guidance is in-line with Street expectations and the raise in full-year guidance is modest, the analyst said. "Certainly nothing wrong with the headline EBITDA and EPS results and guidance but probably not good enough to jump-start the shares," he added.

JPMorgan: "NCLH continues to cite healthy demand, noting that the cumulative booked position for 2024 is at an "all-time high" with 2024 starting with strong momentum," Boss wrote. "Specifically, 1Q net yields came in +16.4% (> +15.8% guide) with occupancy of 104.6% (vs guidance of 104.8%)," he added.

Norwegian Cruise Line raised its net yield guidance by around 90bps from the initial guide, and it implies net per diems of about 4.3% year-on-year, pointing to "potential upside in 2H to estimates," the analyst stated.

NCLH Price Action: Shares of Norwegian Cruise Line Holdings had declined by 0.72% to $15.96 at the time of publication on Thursday.

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Posted In: Analyst ColorEarnings MissesReiterationTop StoriesAnalyst RatingsMoversTrading IdeasAndrew DidoraBofA SecuritiesExpert IdeasJPMorganLizzie DoveMatthew BossPatrick ScholesStories That MatterTruist Securities
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