NCLH Stock Forecast: COVID-19 holds the Future

This NCLH stock forecast article was written by Maria Grishaev, Analyst at I Know First.

Executive Summary

  • NCLH had an unlucky year in 2020 with their stock losing 55.85% while the S&P 500 had risen by 18.23% due to the Covid-19 pandemic.
  • In 2021 the stock has risen by 5.81% YTD against an 18.19% rise of the S&P 500 index.
  • Their recent public offering of shares helps the company to ensure funding during the ongoing shutdown.
  • Based on the SWOT model, my price target for NCLH is 38$, indicating a cautious buy recommendation.
Norwegian Sky


Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) is a leading global cruise company that operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. With a combined fleet of 28 ships with approximately 59,150 berths, these brands offer itineraries to more than 490 destinations worldwide. The COVID-19 pandemic had a major impact on the company forcing it to pause all its cruises.

Source: Yahoo Finance

This week NCLH announced an additional extension of its previously announced suspension of gall global cruise voyages with embarkation dates through June 30, 2021. In addition, earlier this month the company announced the closing of a public offering of 47,577,947 ordinary shares at a price of $30 per share and that Goldman Sachs & Co. LLC, the underwriter of the offering, fully exercised their option to purchase up to 5,000,000 additional ordinary shares. This included a dilution of existing shareholders as the offering represents over 15% of Norwegian’s outstanding stock.

Competition Analysis

The cruise industry has several companies that have a market cap above $9B. Norwegian is one of them.

Source: Yahoo Finance

We can see the COVID-19 pandemic had a similar effect on all major companies in the industry with the stocks falling drastically in February and March 2020. The companies suspended their activities since mid-March 2020 after a series of highly publicized COVID-19 outbreaks and deaths on ships. The companies were forced to raise billions of dollars in debt and equity to maintain their fleets and meet other expenses while shut down.

Infographic: Cruise Industry in Troubled Waters | Statista
Source: Statista

As we can see from the table above, the quick ratio of NCLH and its working capital ratio are better than their biggest competitors, but we can notice that its debt-to-equity ratio and leverage ratios are worse. Thus, there is a higher risk in their debt return if the current suspension will continue for an unknown longer period.

Indicators Show a BUY Signal

Source: Yahoo Finance

As we can see in the chart, the most recent time that the stock price crossed above the moving average for 200 days (the red line) was in November and it signaled a potential change in trend. That was indeed the case as the stock started its rise there. We can also see that the moving average for 50 days (the purple line) crosses above the moving average for 200 days in late November and it also indicates that the trend is shifting up. This is the known “golden cross” that gives us a buy signal.

The Bollinger Bands® technique also indicated a potential opportunity. When the bands come close together it is called a squeeze. A squeeze signals a period of low volatility and is considered by traders to be a potential sign of future increased volatility and possible trading opportunities. This can be seen happening here from January to February 2021.

SWOT Analysis

In order to estimate my target stock price, I’ll use the SWOT analysis due to low number of peer companies.

Strong financial & operational metrics and high net margins.
Current high debt ratio compared to the competition.
High demand for cruises and vacations after a yearlong quarantine all over the world.
The continued suspension of cruises due to the pandemic along with the slow vaccination process in Europe and Asia.

From one side, the company had strong financial and operational metrics prior to the pandemic. According to their annual reports for 2018 and 2019, the revenues observed an 8% growth from $6 billion to $6.5 billion, supported by rising capacity and ticket prices. Their net margins remained relatively flat assisting 22% growth in earnings. In addition, the passenger cruise days and capacity days increased by 1.78% and the occupancy rate remained stable at 107% – indicating a constant cruise demand of cruises. With the expectation the company would be able to return operating in the near future in at least some regions, the demand would be high. Who doesn’t want to go on a vacation?

On the other side, the forced COVID-19 shutdown continues for the foreseeable future and the company doesn’t generate cash flow. It remains to see how long they can serve their debt if the shutdown extends much longer.

Source: Yahoo Finance

The Yahoo Finance coverage for the company is performed by 22 analysts, with the majority of whom took the strong buy position on the stock. The analysts’ community puts the average target price for the stock at $29.91 while it is traded at $30.10.

I think the NCLH stock will rise once the tourism industry will begin to open and place my target price at $38, making it a 25% premium over the current stock price.


I take the buy-side on NCLH stock. It is reasonable to expect further growth in the stock price in the long term once the company resumes its cruise operations as the world’s population receives the COVID-19 vaccination and starts to gradually return to normal.

nclh stock forecast I Know First

Please note that the stock-picking AI of I Know First has a high signal on the one-year market trend forecasts. Also, the light green in the short time horizons is a mildly bullish signal while the dark green in the one-year time horizon is a strong bullish signal.

Past Success with NCLH Stock Forecast

On December 16th, 2020, the I Know First algorithm recommended NCLH as part of the Robinhood Trades Package. The AI-driven stock bullish forecast was successful on the 14 days horizon resulting in a 19.35% gain since the forecast date.

Best Robinhood Stocks

Moreover, on February 19th, 2021 the I Know First algorithm recommended NCLH as part of the Robinhood Trades package. The AI-driven stock bullish forecast was successful on the 7-day time horizon resulting in a 17.30% gain since the forecast date.

NCLH Top Robinhood Stocks
nclh historical price
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Please note-for trading decisions use the most recent forecast.