On Tuesday, Stifel, a financial services firm, increased its price target on Norwegian Cruise Line Holdings (NYSE:NCLH) shares to $26, up from $25, while maintaining a Buy rating on the stock.
The adjustment follows an investor event where the company's CEO and CFO provided detailed presentations on the long-term prospects of the cruise operator.
Norwegian Cruise Line has recently updated its 2024 full-year guidance, forecasting $2.3 billion in EBITDA, a slight increase from the previously estimated $2.25 billion.
Adjusted earnings per share (EPS) are now expected to be $1.42, up from the prior forecast of $1.32. This revision is attributed to robust forward demand and bookings, signaling a positive trend for the company.
The company has set ambitious goals for 2026, including an adjusted EPS of approximately $2.45, which would represent a compound annual growth rate (CAGR) of over 30% from 2024.
Other targets include a 12% return on invested capital (ROIC), a net leverage goal of around 4.5 times, and margins nearing historical levels. Stifel's analyst believes these targets to be realistic and potentially conservative.
Stifel's new price target of $26 is based on a multiple of 10.5 times the company's projected 2025 EBITDA, reflecting positive revisions to the firm's estimates.
This optimism stems from the continued strength in Norwegian Cruise Line's booking and pricing patterns, which have led the analyst to conclude that previous assumptions might have been too cautious.
The company's presentations at the investor event have evidently provided enough confidence for Stifel to make these positive adjustments to its estimates, suggesting a favorable outlook for Norwegian Cruise Line's financial performance in the coming years.
InvestingPro Insights
Following Stifel's upbeat assessment of Norwegian Cruise Line Holdings (NYSE:NCLH), current real-time data and insights from InvestingPro reinforce some of the financial services firm's positive outlook. As per the latest metrics, Norwegian Cruise Line boasts a robust revenue growth of 45.17% over the last twelve months as of Q1 2024, with a significant gross profit margin of 37.49%. This financial health is indicative of the company's ability to capitalize on increasing demand, aligning with Stifel's forward-looking guidance.
InvestingPro Tips highlight that while NCLH operates with a significant debt burden, analysts have revised their earnings upwards for the upcoming period, which could be a testament to the company's potential to improve its financial standing. The company is also trading at a low P/E ratio relative to near-term earnings growth, suggesting that it may be undervalued given its future earnings potential. For those interested in deeper analytics, there are additional InvestingPro Tips available that could further inform investment decisions.
With the stock experiencing significant return over the last week, it's important for investors to note the volatility in stock price movements. Norwegian Cruise Line's short-term obligations exceeding liquid assets could be a concern for some investors, but the company's expected return to profitability this year may alleviate some of these worries. For those looking to explore further insights and tips, InvestingPro offers a wealth of additional information, and users can take advantage of a special offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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