Barclays Upgrades Norwegian Cruise Line Holdings

Investing.com — Barclays upgraded Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) to overweight, citing favorable supply and demand trends in the cruise industry and the company's attractive valuation.

> “NCLH is the highest beta Cruise stock, during what we expect will be a strong year for industry-wide fundamentals, with a relative valuation that is too attractive for us to ignore,” an analyst wrote.

Demand for cruises remains robust, driven by competitive pricing compared to land-based vacations and increased interest in private island destinations. Supply growth across the industry is expected to remain below pre-pandemic levels through 2025 and is projected to decelerate further in 2026 and 2027.

Norwegian Cruise Line, known for its high sensitivity to market trends, is well-positioned to benefit from a strong recovery in the industry. Barclays anticipates 2025 will be a strong year for the sector, supported by improved consumer sentiment and increased bookings post-U.S. elections.

Barclays also maintained a positive outlook on Royal Caribbean (NYSE:RCL), labeling it the best-in-class operator due to catalysts like capital returns and new private island projects. However, it downgraded Viking Cruises, citing its premium valuation and limited upside potential due to its all-inclusive business model.

In summary, Barclays finds Norwegian's valuation attractive with a supportive backdrop for cruise demand and limited near-term risks.