The best cruise stocks are sailing ahead impressively as the industry rebounds.
The pandemic was a major headache for the cruise sector, presenting unprecedented challenges for cruise liners. However, we’ve recently seen an emphatic rebound in the industry, fueled by pent-up demand for travel and leisure.
JPMorgan Research (NYSE:JPM) highlighted substantial acceleration post-pandemic in a recent report. The report showed that the Cruise Lines International Association (CLIA) expects about 35.7 million passengers in 2024, roughly 6% more than the pre-pandemic peak in 2019. Moreover, an expected increase in cruise capacity by 10% from 2024 to 2028 signals a promising horizon for investors.
That said, three cruise industry giants are poised for robust post-pandemic growth while offering excellent upside. These stocks are expected to continue riding the travel resurgence wave, marked by healthy top-and-bottom-line in recent quarters. Moreover, these are the best cruise stocks trading at considerable bargains, which adds to their allure.
Best Cruise Stocks to Buy: Carnival (CCL)
Shares of cruise giant Carnival (NYSE:CCL) are rallying this month after it sailed past Wall Street forecasts with superb second-quarter (Q2) results. Its impressive Q2 print showed a surge in cruise demand, propelling customer deposits to unprecedented highs of $8.3 billion, up $1.3 billion from the previous quarter.
Furthermore, a Non-GAAP EPS of 11 cents highlights the firm’s powerful performance, blowing past analyst estimates by 13 cents. Moreover, sales were up 17.7% year-over-year (YOY) to $5.78 billion, beating estimates by a healthy $90 million. These stellar results compelled CCL’s management to bump its full-year guidance, expecting adjusted net income of approximately $1.55 billion, roughly $275 million higher than earlier projections.
CEO Josh Weinstein’s dynamic leadership has been proven a boon for CCL. Under his leadership, the firm has optimized commercial operations while strengthening its global team. These efforts led to multiple record-breaking quarters for the company, including new highs in revenues, operating income, customer deposits and booking levels.
Royal Caribbean (RCL)
Royal Caribbean (NYSE:RCL) is another trailblazer in the cruise line industry that’s enjoyed a superb run-up in value in the past year. RCL stock is up north of 50% in the past 12 months, marked by spectacular top-line growth.
The excellent uptrend in its results is fueled by a record Wave Season and phenomenal April bookings in terms of volume and pricing. Its first-quarter (Q1) results showed a 29% jump in revenues to $3.73 billion, beating estimates by $39 million. Moreover, its EPS of $1.77 beat estimates by 46 cents. In commenting on these terrific results, CEO Jason Liberty highlighted the strong performance of their fleet, especially the new Icon of the Seas, which surpassed all expectations.
Moreover, despite this year’s momentum, RCL attracts a Strong Buy rating, with a 10% upside from current prices. Hence, RCL’s momentum clearly indicates its powerful market position and promising long-term outlook in its niche.
Norwegian Cruise Line Holdings (NCLH)
Norwegian Cruise Line Holdings (NYSE:NCLH) stands out as a leading value pick in the cruise industry after shedding 19% over the past year and an 11% decline YTD. The firm continues delivering stellar financial performance, attracting high-net-worth clients while appealing to the growing millennial and Gen-Z demographics. Norwegian’s management has noted this shift as one of the top drivers for its expansion.
Recent results have been impressive, with its top line growing upwards of 20.3% YOY in Q1 and a 7-cent earnings beat. Moreover, its management bumped forward guidance following indications following another quarter of record bookings.
The management expects NCLH to raise its adjusted EBITDA guidance by $5 million to $2.25 billion and its adjusted EPS guidance to $1.32 from $1.23, a couple of cents higher than forecasts. Adding to the optimism, analysts at Truist recently bumped NCLH to a Buy, pointing to the stock’s attractive upside potential. This endorsement underscores the healthy outlook for Norwegian as it continues innovating.
On the date of publication, Muslim Farooque 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.
