Setting Sail for Profits: The Top 3 Cruise Line Stocks to Watch in 2024
Navigating the seas of opportunity, investors are effectively steering towards the most promising cruise line stocks to buy, backed by the industry’s resurgence post-pandemic. Moreover, with the sector buoyed by a loyal clientele and scalable business models, it offers tremendous long-term upside.
Furthermore, investor confidence in the sector has been bolstered by the favorable winds of HSBC’s recent endorsements. Analyst Meredith Jansen highlights how the pandemic has charted a new course for travel while strategic innovation and digital prowess continue to redefine competitive tides. HSBC’s bullish stance celebrates businesses proficient at sailing the evolving currents. Additionally, with an eagle eye on nimble, asset-light strategies and loyalty-centric offerings, savvy investors are aligning their compasses with cruise line contenders primed to capitalize on an evolving travel landscape.
Royal Caribbean Cruises (RCL)
Royal Caribbean Cruises (NYSE:RCL) is efficiently charting a course through the buoyant financial seas, with its shares up 87% year to date. This uptick is more than a seasonal wave; it’s indicative of the robust health and promising forecast for the cruise behemoth. Analysts from Truist Securities are seeing a horizon aglow with incredible opportunity, predicting industry-wide revenues to swell by 55% to 60% in 2024 relative to 2019, while 2025 figures are expected to crest over a 100% increase.
The third quarter brought a bounty of good news for RCL, as it docked with adjusted EPS at $3.85, outperforming estimates by a handsome 46 cents. Its revenue surged by 40.5% year-over-year to $4.2 billion, $140 million ahead of market expectations. Furthermore, the tailwinds are robust, with demand across North America and Europe translating into surging load factors and robust pricing. Moreover, analysts at Tipranks suggest that the stock is a “Strong Buy,” offering a 34% upside from current levels.
Norwegian Cruise Line (NCLH)
Norwegian Cruise Line (NYSE:NCLH) is an attractive proposition for investors, with it trading at a tempting three times forward cash flows. The company’s third quarter performance shores up this perspective, with a non-GAAP EPS of 76 cents outperforming estimates by eight cents and revenue of $2.54 billion, marking a 56.8% increase year-over-year, topping expectations by $30 million.
With the resilience to weather short-term storms and a trajectory set for long-term efficiency, Norwegian’s financial ship is steady and poised for robust growth ahead. Moreover, with an occupancy rate of 106% in the quarter, which aligns with forecasts, NCLH anticipates a full-year 2023 adjusted EBITDA of around $1.86 billion. This steadfast outlook is encouraging, given the external challenges linked with the Maui wildfires and tensions in Israel. Hence, NCLH’s ability to navigate through tumultuous times solidifies its position as a top stock with an attractive upside for value investors.
Carnival Corporation (CCL)
Carnival Corporation (NYSE:CCL) is efficiently sailing through the fiscal waters with aplomb, as evidenced by its latest quarterly earnings. The cruise giant reported robust sales of $6.85 billion, a noteworthy rise of 59.21% year-over-year, surpassing projections by an impressive $161.37 million. Additionally, the company’s EPS remains remarkably strong, docking at 86 cents, roughly 13 cents ahead of the consensus, signaling investor confidence and underscoring a trend toward recovery.
Yet, the cruise operator isn’t immune to the challenging economic climate. High fuel prices and inflationary pressures are buffeting through the sector, pinching financial margins. Despite these challenges, Carnival’s share price has shot up more than 55% year-over-year, tempting investors to climb aboard for the long voyage of potential upside.
Amidst these conditions, Carnival is charting a course of fiscal prudence with its remaining long-term debt, while substantial at $31 billion, which has been trimmed by over $4 billion from its peak. Such strategic debt management casts a ray of promise atop Carnival’s financial horizon, offering spectacular long-term upside potential. If you are looking for promising cruise line stocks, start here.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines