It’s been smooth sailing for most cruise stocks to buy now.
Companies like Norwegian Cruise Lines (NYSE:NCLH) report record bookings thanks to booming demand. Carnival (NYSE:CCL) says it’s “capturing more guests than ever before.” Royal Caribbean (NYSE:RCL) is hiring thousands to staff its ships and private destinations to meet demand.
“We’re getting close to the point where we’ll soon be taking more bookings for ’25 than we are for 2024,” Royal Caribbean Group CEO Jason Liberty told investors during a late-April earnings call, adding the company is also taking bookings for 2026.
As the industry leaves the pandemic in its wake, many top cruise companies are investing billions in new ships, too. Earlier this year, for example, Carnival ordered another Excel-class ship, which is expected to hit the water in 2028.
With demand showing no signs of slowing, there’s still time to invest in some of the best cruise stocks to buy now.
Royal Caribbean (RCL)
The last time I highlighted an opportunity in Royal Caribbean, I said, “I’d use any weakness as an opportunity to buy. After all, demand isn’t slowing. And unless something catastrophic happens to the overall economy, RCL should see even smoother sailing ahead.”
That was on April 4, as RCL traded at about $135.
Today, after testing a high of $157.50, it’s just starting to bounce from support at $145, where it’s still a buy. In the near term, I’d like to see RCL initially retest its prior high of $157.50, which shouldn’t be a problem with surging cruise bookings.
Earnings have been just as solid as expected. The company’s adjusted earnings per share of $1.77 in its first quarter beat estimates by $0.46. Revenue of $3.73 billion – up 29.2% year over year – beat by $38.9 million. It also hiked its EPS guidance to a new range of $2.65 to $2.75 compared to estimates of $2.37.
Carnival (CCL)
I’d also use the recent weakness in Carnival as an opportunity to buy.
With strong demand and limited inventory, Carnival numbers have been impressive. Revenue is up to record, hitting a first-quarter high of $5.4 billion.
Deposits are rocketing higher, hitting $7 billion in the first quarter. Their adjusted EBITDA more than doubled year over year to $871 million. Even its loss per share narrowed from $0.55 last year to $0.17 this year. In addition, the CCL stock trades at less than sales, with a price-to-sales ratio of just 0.88.
Carnival shares are also benefiting from news that the company will absorb P&O Cruises Australia into Carnival Cruise Line next year.
“Despite increasing Carnival Cruise Line’s capacity by almost 25% since 2019 including transferring three ships from Costa Cruises, guest demand remains incredibly strong so we’re leveraging our scale in an even more meaningful way by absorbing an entire brand into the world’s most popular cruise line,” Carnival Corp. CEO Josh Weinstein said.
Norwegian Cruise Line (NCLH)
The weakness of Norwegian Cruise Line is another strong buy opportunity.
With strong demand and booking trends, analysts at Truist just upgraded NCLH to a buy rating with a price target of $21. The firm noted it’s “time to get back onboard NCLH” and that there is still plenty of “attractive upside potential” with the stock.
Earnings were solid here, too. EPS of $0.16 beat by $0.07. And while revenue did miss by $44.54 million, it was still up 20.27% year over year to $2.19 billion.
Helping, the company recently increased its full-year 2024 guidance, adjusted EBITDA expectations from $2.25 billion to $2.3 billion and adjusted EPS numbers to $1.32 to $1.42 from expectations of $1.36.
Even better, several analysts at Deutsche Bank, Wells Fargo, Stifel, Goldman Sachs, UBS and Citi raised their price targets on NCLH. Plus, company director Zillah Byng-Thorne just bought 13,360 shares for about $220,440.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
