Norwegian Cruise Line (NYSE:NCLH) stock has rallied nearly 19% in the past month and currently is trading a bit below $21, having rebounded from its 52-week low of $14.90. Investors looking at Norwegian Cruise Line stock will be pleased to know now that three factors build a more bullish scenario. These factors could lead to a rally as we approach the beginning of the summer season.
First, the Centers for Disease Control and Prevention has “lowered its risk assessment of cruising.” This is big news, as cruise ships are now considered a Level 2 risk for coronavirus — those levels range from Level 1 to Level 4, with 4 being the highest.
This announcement will boost people’s confidence in returning to cruises and will be highly beneficial for robust and sustainable sales growth for Norwegian Cruise Line. We are not completely done with Covid-19, but vaccines have given us some breathing room, and for the cruise industry, it’s a chance to return to profitability.
Second, Norwegian Cruise Line feels enough confidence about the improvement of its business that it decided to raise its gratuities. Carnival (NYSE:CCL) soon followed the example of its competitor. The management of the company is a good gauge of sentiment for business prospects, so this raise in gratuities is a strong signal that better days for the cruise industry are coming. In this context, NCLH stock should benefit and rise.
Lastly, Norwegian Cruise Line has announced “the launch of the cruise industry’s first collection of NFTs.”
NFTs open a whole new different and possible lucrative market for Norwegian Cruise Line. The company will have only six NFTs open for sale and auction, and these NFTs are a celebration of its new Norwegian Prima Class.
Capitalizing on the opportunities of digital art opens the way for the metaverse too. That’s enticing, given the strong brand name and infinite opportunities for Norwegian Cruise to explore.
Investors should gradually be excited for better days for NCLH stock and monitor selloffs as better risk-adjusted opportunities to capitalize on the rebound of the cruise industry.
On the date of publication, Stavros Georgiadis, CFA 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.
