Cruise stocks are relevant for investors in much the same way that they’re perfect for many travelers: bang for the buck. By boarding a cruise ship, you’re not only going to a new destination; instead, the journey to that point is part of the fun. You can’t say that crammed into a flying tube on your way to Paris or wherever.
Just as importantly, consumer sentiment for vacations remains relatively robust. True, the intensity associated with the phenomenon known as revenge travel has been muted. People just aren’t as anxious to leave the house as they were during the worst of Covid-19. Nevertheless, households are still prioritizing their time off. That’s a positive for cruise stocks.
Plus, with the consumer economy facing challenges due to elevated prices and high borrowing costs, people need to be more conscientious about their discretionary spending. That’s where these massive ships can provide that relevant bang for the buck. On that note, below are cruise stocks to consider.
Carnival (CCL)
At the moment, Carnival (NYSE:CCL) appears to be performing reasonably well. In the trailing month, CCL stock gained almost 15% of equity value. However, when stacked against the beginning of the year, shares have gained less than 7%. That might signal that an opportunity for additional upside is available for those just taking wind of the idea.
One of the more important factors to consider is the recent financial performance. In the past four quarters, Carnival posted an average earnings per share of 19 cents. This figure beat out the collective consensus view of 11 cents. In fact, the average earnings surprise clocked in at a robust 183.28%. That means experts have been incredibly shocked by Carnival’s resilience.
What’s more, CCL stock trades at only 0.99X trailing-year sales. In the past year, this metric came in at 0.95X. That’s not much of a premium. In addition, analysts anticipate that sales may hit $24.85 billion by the end of this year. If so, that would be a 15.1% lift from last year’s haul of $21.59 billion. Thus, CCL is one of the cruise stocks to consider.
Royal Caribbean Cruises (RCL)
Another top-tier player among cruise stocks, Royal Caribbean Cruises (NYSE:RCL) enjoyed a strong session on Friday, gaining 2.5%. In the past month, shares moved up slightly over 12%. Since the beginning of the year, the equity gained 40%. Notably, management will release its second-quarter earnings report on July 25, making for a difficult decision.
Should investors buy RCL stock into strength now or wait until after the results? Here are the facts. In the past four quarters, the company posted EPS of $2.17. That’s above the consensus view of $1.87, yielding an earnings surprise of 18.1%. Also, the Q1 2024 report saw an earnings surprise of 33.1%. So, if momentum is a thing, Royal could beat in Q2.
Investors should note that RCL stock trades at 3.3X trailing-year revenue. That’s a noticeable premium over the prior year’s print of 2.38X. However, it’s also important to realize that analysts are very bullish on the company’s prospects.
In particular, by year’s end, sales may hit $16.41 billion. If so, that would mean an 18.1% growth rate, making it one of the enticing cruise stocks to buy.
Norwegian Cruise Line (NCLH)
When it comes to cruise stocks, Norwegian Cruise Line (NYSE:NCLH) just hasn’t kept pace with its peers. On Friday, NCLH barely moved into positive territory relative to the prior session. In the business week ending July 19, shares couldn’t even muster a half-percent gain. Since the start of the year, NCLH moved up a bit more than 7%. That’s okay – nothing exciting.
One of the key reasons why Norwegian has been shaky centers on the underlying financial performance. In the past four quarters, the company’s average EPS came out to 26 cents. That’s better than the consensus view of 23 cents. Here’s the thing: in Q4, the company suffered a steeper loss per share than anticipated, which has hurt the price action.
Nevertheless, one bad quarter doesn’t break the entire narrative. Enticingly, the red ink also caused NCLH stock to trade at 0.95X sales. In the past year, this metric stood at 1.16X. So, it’s relatively undervalued.
For fiscal 2024, analysts EPS growth of nearly 106% to $1.44. Also, the top line may expand to $9.37 billion, up 9.6% from last year.
On the date of publication, Josh Enomoto 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
