Norwegian Cruise Line Holdings Ltd
The analyst upgraded the rating for Norwegian Cruise from Hold to Buy. The price target was raised from $20 to $21.
The Norwegian Cruise Line Holdings Thesis: Industry checks indicate an acceleration in booking volumes in April and early May, "following an already strong January-March Wave season," Scholes said.
The upgrade came on the heels of another rating upgrade courtesy of Mizuho Securities analyst Ben Chaiken.
Industry checks suggest encouraging trends in cruise bookings and pricing.
This increase in booking volumes does not coincide with any "material" decline in pricing, Scholes wrote.
Scholes remains "positive on the cruise sector." He expects modest earnings upside from continued pricing growth "on the remaining cabins left to sell for 2024."
Although demand and pricing trends have improved, Norwegian Cruise Line's shares have lost around 20% since last July, compared to gains of around 20% by the S&P 500 during the same period, Scholes stated.
"Besides a strong revenue growth environment, we really like the potential/optionality the company has with further monetizing Great Stirrup Cay, something we believe management is more than aware of as well," he further added.
NCLH Price Action: Norwegian Cruise shares declined by 1.69% to $16.28 at the time of publication on Wednesday.
