Please ensure Javascript is enabled for purposes of website accessibility

Carnival, Royal Caribbean, and Norwegian Cruise Line Stocks Will All Outperform, an Analyst Says

By Rhian Hunt - Mar 2, 2021 at 12:53PM

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

The investment bank Macquarie raised its price target by 122% in one case.

Shares of Carnival (CCL 5.75%), Royal Caribbean (RCL 4.79%), and Norwegian Cruise Line Holdings (NCLH 5.26%) are all gaining this morning after investment bank Macquarie Group (MQG 2.92%) boosted their ratings to outperform. Paul Golding, a Macquarie analyst, laid out the overall cruise industry bull case in a research note.

Golding said "most negative catalysts are now in the rearview mirror" since COVID-19 is retreating while vaccination numbers are climbing. He also noted that sailing suspensions are already in place through spring, and said his firm believes "the next possible round of suspensions could be bookended by a firmer resumption announcement in the U.S." Macquarie predicts a summer sailing restart is likely, perhaps around June 30.

A lounge chair facing the sun on the deck of a cruise ship.

Image source: Getty Images.

The firm also upped its price targets on all three of the cruise lines. While the stocks are already trading close to the new targets, the revised figures are still a major boost from Macquarie's previous predictions. Carnival's price target rose almost 94% from $16 to $31. Royal Caribbean won an approximate 85% price target boost from $54 to $100, while Norwegian got the biggest increase, from $18 to $40, or 122%.

Macquarie also said the approaching update by the Centers for Disease Control and Prevention (CDC) to its technical guidelines may offer "visibility on a restart, allowing the companies to prep for peak season." It added that "while the risk of new variants could make a resumption choppy, vaccine modifications and lockdown fatigue" stand a good chance of softening the impact of new COVID-19 developments.

Royal Caribbean just announced its first-ever "fully vaccinated" cruises out of Haifa, Israel, in May, but Norwegian says it will need three months to get back to sea after the CDC no-sail order ends.

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

Carnival Corporation Stock Quote
Carnival Corporation
CCL
$13.97 (5.75%) $0.76
Royal Caribbean Cruises Ltd. Stock Quote
Royal Caribbean Cruises Ltd.
RCL
$58.19 (4.79%) $2.66
Norwegian Cruise Line Holdings Ltd. Stock Quote
Norwegian Cruise Line Holdings Ltd.
NCLH
$16.20 (5.26%) $0.81
Macquarie Group Limited Stock Quote
Macquarie Group Limited
MQG
$183.00 (2.92%) $5.19

*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 service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

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.