Barclays analyst Brandt Montour highlights that the re-energized consumer and low tariff exposure will benefit the travel and experiences sectors in 2025.
The analyst points out that the cruise industry has potential for growth, leading to a reshuffling of ratings for cruise and timeshare companies.
Amid such a scenario, the analyst upgraded Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) to Overweight from Equal-Weight, boosting the price forecast from $28 to $32.
The analyst underscores the upgrade, citing its higher beta in a recovering macro environment, exposure to cross-Atlantic travel, and unique multi-year cost opportunities within the cruise industry.
In a recovering macro environment with a potentially extended cycle, the company is seeing strong demand in European and Alaska sailings for 2025, according to proprietary pricing data.
The analyst writes that the company's multi-year cost savings program could drive earnings growth and balance sheet improvements, while concerns about pricing power in a more balanced cruise market are seen as minimal due to the cruise industry's continued value compared to alternatives.
Despite short-term challenges, the analyst sees the company as an attractive entry point with strong long-term potential.
Montour also notes that, based on 2026 estimates, the company is particularly undervalued compared to its peers.
Price Action: NCLH shares are trading lower by 0.62% to $26.65 at last check Friday.