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A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt. But this stock is soaring today because of the positive prevailing trends in the business. The cruise line can carry more cruisers now than ever (higher capacity), has full occupancy, average ticket prices are up, and onboard spending is up, as well. The cruise industry was at the epicenter of the consumer discretionary sector which was rocked hard during the pandemic. Major COVID-19 outbreak headlines caused monumental damage to shares.
Why Norwegian Cruise Lines Plunged 25% in August - The Motley Fool
Why Norwegian Cruise Lines Plunged 25% in August.
Posted: Sat, 09 Sep 2023 07:00:00 GMT [source]
Norwegian Cruise Line reports first profitable year since 2019
Norwegian Cruise Line (NCLH) Surpasses Market Returns: Some Facts Worth Knowing - Yahoo Finance
Norwegian Cruise Line (NCLH) Surpasses Market Returns: Some Facts Worth Knowing.
Posted: Mon, 18 Mar 2024 07:00:00 GMT [source]
We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
Why You Should Consider Debt When Looking At ROE
Cruise line stocks stormed back into investor fancy earlier this year, but they have corrected sharply since their summertime highs. Norwegian Cruise Line (NCLH 0.66%) stock is now down 36% since hitting a high-water mark in late July. See our analysis on Norwegian Cruise Line Stock Chances Of Rise for more details on the stock’s recent performance and where it could be headed. We’d like to share more about how we work and what drives our day-to-day business.
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NCLH's incredibly strong results highlight the strength in its brand and the cruise industry, notes Ivan Feinseth. Norwegian Cruise Line (NCLH) posted its fourth-quarter results revealing a quarterly loss of $0.18 per share. However the stock is trading higher thanks to upbeat first-quarter guidance and a full-yea... All of the cruise-ship companies incurred significant debt during the worst of the COVID-19 pandemic, including Norwegian. Those are the big-picture trends that are meaningful to Norwegian's business. And because the trends are good, the company is guiding for better-than-expected financial results in the upcoming first quarter of 2024.
However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day. One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Norwegian Cruise Line Holdings has a better ROE than the average (17%) in the Hospitality industry.
Analysts’ Opinions Are Mixed on These Consumer Cyclical Stocks: Bright Horizons (BFAM) and Norwegian Cruise Line (NCLH)
It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum. Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days. Now while cruising from the U.S. ports is set to resume this July, we still think that 2021 is likely to be a relatively slow year for Norwegian. Norwegian will likely miss out out on much of the lucrative summer cruising season and it’s also possible that older customers - who are a key demographic - will take a wait and watch approach to cruising post the pandemic. That said, 2022 is looking much stronger, with consensus estimates pointing to revenues of $6 billion, just slightly below the $6.5 billion in revenue the company posted in 2019. Cruise stocks rallied in intraday trading Tuesday after a strong earnings report and forecast from Norwegian Cruise Line Holdings (NCLH).
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The share count and debt load at Norwegian has roughly doubled since the end of fiscal 2019, but the bloat isn't permanent. However, shareholder returns remain a concern in the longer-term for Norwegian stock. The company spent the better part of the last year raising funds, with its debt load roughly doubling to $12 billion between December 2020 and the end of March 2020. This should lead to higher interest costs, constraining the company’s long-term profitability. Moreover, shareholders have also been significantly diluted by the company’s equity issuances, with shares outstanding rising to 370 million as of April 2021, up from 213 million in early 2020.
MIAMI , Feb. 15, 2024 /PRNewswire/ -- Oceania Cruises , the world's leading culinary- and destination-focused cruise line, has announced that the premiere issue of their brand new Your World magazine ... A Norwegian cruise ship has been denied permission to dock in Mauritius over fears of a potential cholera outbreak on board. MIAMI , March 20, 2024 /PRNewswire/ -- Oceania Cruises , the world's leading culinary- and destination-focused cruise line, has announced the appointment of its two Master Chefs of France, Chef Alexi... Sailings explore destinations from Tokyo to Cape Town to Bali to Rio de Janeiro MIAMI , March 26, 2024 /PRNewswire/ -- Oceania Cruises, the world's leading culinary- and destination-focused cruise lin... Norwegian Cruise Line Holdings unveils plans for eight new vessels, expanding its fleet with nearly 25,000 additional berths across three brands. The company also initiates construction of a multi-ship pier at Great Stirrup Cay, enhancing its Caribbean port infrastructure.
Specifically, Norwegian is calling for Q1 adjusted net income of $50 million, while Wall Street had expected an adjusted net loss. For the year, the company is expecting earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.2 billion, a strong 18% increase from 2023. Revenue was ahead of guidance, whereas its net loss was a little more than expected.
Owning cruise stocks when supply growth has been low for an extended period of time, as per the analyst. While the headline of eight ships might make investors panic, the analyst urged them to look at the fine print. With profitability expected to nearly triple between 2024 and 2027, you can buy the cruise line shares at a market cap that's just 4.3 times its 2027 profit outlook. Norwegian has posted double-digit percentage beats in its last three quarters. The expected return after a rise is understandably lower than after a drop as detailed in the previous question.
Norwegian has spent the better part of the last year raising funds via debt and equity issuances, with its debt load standing at about $11.8 billion at the end of Q4, up from about $6.8 billion a year ago. The higher interest costs are likely to weigh on the company’s profitability going forward. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.15% per year.
Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks. Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time. Now while cruise stocks have moved considerably over the last year, 2020 has also created many pricing discontinuities which can offer attractive trading opportunities.
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