Please ensure Javascript is enabled for purposes of website accessibility

Why Norwegian Cruise Line Stock Fell 10% in January

By Demitri Kalogeropoulos - Updated Feb 4, 2021 at 8:01AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another month, another extension in the global pause on sailings.

What happened

Norwegian Cruise Line Holdings (NCLH 1.89%) shareholders underperformed a declining market last month. Shares fell 10% in January compared to a 1% drop in the S&P 500, according to data provided by S&P Global Market Intelligence.

That slump added to significant short-term losses for the cruise ship giant, which shed more than half of its value in 2020.

A cruise ship sits anchored near an island.

Image source: Getty Images.

So what

Like its peers, Norwegian remained under a near-complete global pause in sailings last month. On Jan. 19, the company extended its projected suspension through at least April due to continued COVID-19 outbreak concerns. Investor uncertainty was further bolstered by news of novel virus variants that may complicate vaccination efforts and force the cruise ship giant to continue relying on debt to finance its business.

Now what

Shareholders won't have a good read on the timing of Norwegian's coming growth rebound until a clear path emerges for the end of the pandemic. In the meantime, the stock will remain pressured by any developments, including further variant outbreaks and vaccine supply challenges, that seem to push that potential global recovery deeper into 2021.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Norwegian Cruise Line Holdings Ltd. Stock Quote
Norwegian Cruise Line Holdings Ltd.
NCLH
$11.33 (1.89%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.