Cruise stocks are surging nearly across the board today after Norwegian Cruise Line (NYSE:NCLH) lifted its full-year earnings outlook on strong demand.
What’s up with cruise stocks today?
Well, the likes of Norwegian, Carnival (NYSE:CCL) and Royal Caribbean (NYSE:RCL) are up 7.5%, 7.2%, and 4%, respectively, heading to the bell. It seems the cruise operators are benefitting from changing tides in the cruise industry, as well as general bullish momentum in the stock market as a whole.
Indeed, Norwegian told analysts that is has continued to experience strong demand, evident from record bookings almost halfway through the year. As a result, the company raised its outlook for adjusted earnings per share (EPS) to $1.42 from $1.32. This is above the projected EPS of $1.36.
“We have continued to see very strong demand and record bookings,” said CFO Mark Kempa in a release. “We are now thrilled to launch this financial plan by setting long-term targets with increased 2024 guidance, putting ourselves on solid footing to enhance shareholder value in the coming years.”
The cruise line also described a new strategy, headlined by new marketing and initiatives campaigns. Norwegian Chief Executive Harry Sommer laid out the new strategy during the company’s investor day event:
“Our new ‘Vacation Better. Experience More’ vision not only captures our commitment to offer our guests unforgettable vacation experiences, but focuses our over approximately 40,000 team members to deliver on that commitment through the several strategic initiatives that comprise our ‘Charting the Course’ strategy,”
Cruise Stocks Attempt Surprise Reversal in Bearish Industry
Despite today’s gains, cruise stocks remain something of a cautionary tale this year. Carnival and Norwegian are each down about 7%, even as the S&P 500 is up over 12% over the same period.
Only Royal Caribbean is in the green for the year, up 23% on record seasonal bookings earlier in the year.
Despite the weakness of cruise stocks, there seems to be plenty of interest in tourism lately, as evident from cruise lines’ record bookings. Whether that brings a reversal in cruise stocks, however, remains to be seen.
On the date of publication, Shrey Dua did not hold (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.
