What happened

Shares of Norwegian Cruise Line Holdings (NYSE:NCLH) climbed on Wednesday, following bullish analyst commentary. As of 11:20 a.m. EDT, the cruise ship operator's stock price was up more than 6%.  

So what 

Goldman Sachs analyst Stephen Grambling raised his rating on Norwegian Cruise Line's shares from neutral to buy on Tuesday. He also boosted his price forecast from $27 to $37. Grambling's new price target represents potential returns to investors of roughly 29% from the stock's current price near $28.65.

A person is holding a wine glass up to the sky while onboard a cruise ship.

Norwegian Cruise Line's shareholders could soon have reason to celebrate. Image source: Getty Images.

Grambling cited Norwegian's industry-leading capacity growth as one of the reasons for his optimism. He also highlighted the company's relatively low leverage levels compared to other cruise ship operators.

Additionally, Grambling posited that Norwegian's smaller fleet size will allow it to more easily adapt to new coronavirus-related safety guidelines. 

Now what

The COVID-19 crisis has taken a heavy toll on the cruise ship industry. With many of their ships unable to set to sail due to safety concerns, Norwegian and other cruise lines were forced to raise billions of dollars of cash via share and debt offerings to offset their massive losses.

Yet with vaccinations ramping up in the U.S. and other areas of the world, investors are looking ahead to an eventual recovery. And they're taking Goldman Sachs' upgrade on Norwegian Cruise Line's stock as a signal that it could come sooner than many people expected.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.