Norwegian Cruise Line boosts profit outlook again

Shares of Norwegian Cruise Line Holdings (NCLH) are surging on Monday, buoyed by the company's decision to raise its profit guidance for the second time within the span of a month. This upward revision is being attributed to continued demand for the company's cruise offerings, despite concerns over the potential impact of inflation on consumers.

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This post was written by Angel Smith

Video transcript

You wanna stick with travel shares in Norwegian cruise lines.

They're jumping after the company lifted its guidance for the second time this month.

Continuing to see record bookings.

We've been talking about this pent up demand, the fact that consumers are still willing to spend on some of their trips, Norwegian, they're benefiting from that boost that we're seeing within its guidance.

You're looking gain gains of just about 7%.

Now it is a second profit boost like we were just talking about in a month here.

They boosted the EPS outlook.

They now see a dollar 42 the 2020.

This plan now includes improved margins and lower net leverage.

So the demand is still there today, Mattie, I think the question though is what that demand is going to look like, kind of what we're just talking to the CEO of Priceline about there minutes ago, just if we do see any sort of waning demand because of very sticky inflation because of the fact that consumers are still under pressure later on this year into 2025 how quickly maybe that could potentially erode or really weigh on some of these larger travel names.

Yeah, it's a really good point, especially because, and we've talked about this before Sean and you've pointed out that the amount of growth that we've already seen from some of these cruise lines does put them in a position where it's a little bit hard to maintain that growth.

But interestingly, they do note that by 2026 they expect EPS to hit 245.

So there is a little bit of longevity, at least in terms of what they're seeing here.

But you mentioned the full year adjusted eps that they're anticipating currently about a dollar 42 up from the one, a dollar 32 rather uh situation that they're in currently and again rising on those boosted year targets.

Also, we're seeing peers in the space gaining as well.

So that could be an indication that the street is seen that we're gonna have kind of gains across the board when it comes to some of these cruise lines of Viking holdings, Royal Caribbean and Carnival, seen some green across your screen when it comes to the travel space.

Uh So uh potentially a bet that consumers are gonna continue traveling, not just overall but on cruises, which fascinates me because I I would never go on a cruise ever.

But yeah, there is a yeah, no personal choice, but I think it has been remarkable, right?

This unprecedented surge that we have seen within the cruise industry because it wasn't too long ago, four years ago, when people, unfortunately, because of COVID, people have been sick on shifts.

There's people that were stranded in, in Xyz locations and there was this very much, this sentiment, we would talk to former passengers, we talked to some of the executives in the cruise industry and there were certainly some fears and trepidation just in terms of what that recovery was going to look like, how quickly people would be willing to go back on cruises.

And then not only are you trying to get back to what your customer base was before?

But as always, you're trying to expand that customer base and the realistic ability for them to do that when you take a look at these results and it goes beyond a region like you were just saying, Royal Caribbean Carnival also reporting record booking levels.

It really is amazing and astonishing how quickly the industry has been able to recover and then further sees some of that growth here in the years ahead as as is reflected here from this outlook uh update that we're getting from Norwegian.

So.