For a while, there weren’t any top cruise stocks to buy because the industry had been decimated by the Covid-19 pandemic. But now, cruise line operators are seeing record bookings for 2024 as travel demand continues to recover, so it might be the right time for investors to take a look at this industry.
According to data from the Cruise Lines International Association (CLIA), a record 35.7 million people are expected to cruise in 2024, up from 31.5 million in 2023, and 6% more than the number of passengers that sailed in 2019 before the industry was shutdown by the pandemic.
Capacity is now becoming an issue, with many cruise ships booked solid for the next 12 months. Some cruise ship operators are warning that they’re in danger of running out of capacity in coming months. Others have said that repeat bookings doubled heading into this year, and that demand is accelerating as vacationers return in force and the industry rebounds strongly post-pandemic.
As more people take to the high seas, here are the top three cruise stocks to buy in March 2024.
Royal Caribbean (RCL)
Royal Caribbean (NYSE:RCL) stock has enjoyed a nice recovery over the past year, having risen 72% since March 2023. While the run has been impressive, RCL stock is currently trading 7% below where it was before the Covid-19 pandemic struck in early 2020. This means there is likely a buying opportunity with Royal Caribbean despite the big rise in its share price over the past 12 months. Strong passenger bookings and financial results have powered the recovery.
In February, Royal Caribbean reported earnings per share (EPS) of $1.25 for the fourth quarter of 2023, and revenue of $3.33 billion. Wall Street had expected earnings of $1.14 a share on revenue of $3.36 billion. With these results, Royal Caribbean achieved its seventh consecutive quarterly earnings beat.
The company also issued a strong outlook for the year ahead, saying that it expects EPS to grow 40% to between $9.50 and $9.70 a share. The earnings guidance, if achieved, would set a record at Royal Caribbean.
Of the three stocks on this list, RCL has rebounded the most since the pandemic. Thanks to the hype surrounding its newest ship, Icon of the Seas, it has received a lot of favorable press as well. With plans to continue production of its mega ships, RCL is probably one of the top cruise stocks to buy right now.
Carnival (CCL)
Shares of Carnival (NYSE:CCL) have also bounced higher in the past 12 months, gaining 47%. However, CCL stock still has a ways to go to recapture its former glory. Despite the nice gain over the last year, Carnival’s share price is now 71% below where it was five years ago, long before anyone had heard of Covid-19. The good news is that the company’s bookings and occupancy levels are at historic highs, leading to both accelerating profits and debt repayments at the company.
So far this year, CCL stock has run into some headwinds that have pushed the share price down 8%. Carnival’s largest ship ever, the Sun Princess, was originally scheduled to sail in February of this year, but the launch schedule was delayed. Additionally, an ongoing conflict in the Red Sea has forced the company to reroute 12 ships at considerable cost. However, investors shouldn’t worry about these issues too much. Long-term, Carnival looks to be back on track.
Norwegian Cruise Line (NCLH)
Norwegian Cruise Line (NYSE:NCLH) has reported its first profitable year since 2019. That news sent NCLH stock up 20% in a single trading session. However, like the other names on this list, Norwegian still has some distance to cover to get its stock back to where it was trading pre-pandemic. The company’s share price today is 64% lower than where it was five years ago. A return to profitability is certainly a step in the right direction, and what analysts and investors have been waiting to see from the entire cruise industry.
Norwegian reported full-year 2023 net income of $298 million, or 70 cents per share, its first annual profit since 2019. Revenue totaled $8.5 billion, a 76% increase from 2022 and 32% higher than in 2019 before the Covid-19 crisis. Norwegian also issued bullish guidance for 2024, saying it expects a strong year ahead, with 2024 bookings and prices each at all-time highs. The company forecast full-year 2024 net income of $1.23 a share, which would be a 76% year-over-year (YOY) increase.
On the date of publication, Joel Baglole 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.
