Norwegian Cruise Line Faces Declining Bookings, Currency Loss: Analyst

BofA Securities analyst Andrew G. Didora on Wednesday reiterated a Neutral rating on the shares of Norwegian Cruise Line Holdings Ltd NCLH and lowered the price forecast from $23.00 to $20.00.

NCLH posted first-quarter FY25 earnings per share of 7 cents, falling short of its 8 cents forecast and the 9 cents expected by both BofA and the broader consensus. The analyst noted that this is a rare miss for the company.

Underlying performance was slightly stronger, with net yields and unit costs outperforming estimates by 20 and 70 basis points, respectively.

The shortfall largely stemmed from a $23 million foreign exchange loss recorded late in the quarter due to currency volatility.

NCLH was the first among its peers to point out a decline in its 12-month advance booking levels, even as others like Viking previously noted booking fluctuations.

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This development isn’t unexpected given broader economic pressures, declining consumer sentiment, recent discounting in NCLH’s Oceania line, and softening demand across the travel sector.

Although similar trends likely affect other cruise operators, the industry benefits from extended booking windows, allowing time for adjustments.

As a result, the analyst has revised NCLH's 2025 and 2026 earnings projections down to $2.07 and $2.53, respectively.

Norwegian Cruise experienced the weakest performance in its European routes with the sharpest drop seen in April. Europe accounts for 44% of its third-quarter capacity.

Caribbean bookings makes up 40% of capacity. As a result, the company slightly trimmed its constant currency net yield forecast to 2–3% from 3%.

Norwegian Cruise aims to reduce its high net leverage primarily through EBITDA growth. It expects net leverage to reach 5.3x by the end of 2025 and 4.8x by 2026. Net debt is expected to rise by nearly $2 billion.

Price Action: NCLH shares traded higher by 1.65% at $16.30 at last check Thursday.

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