Norwegian Cruise Line stock (NYSE: NCLH) has rallied by about 11% over the last five trading days, significantly outperforming the S&P 500 which is up by 2.7% over the same period. The recent gains come as the U.S. Centers for Disease Control and Prevention said that fully vaccinated people are likely to see low risk from travel, noting that they would no longer need to undergo Covid-19 testing or quarantines by the CDC for travel within the U.S. Moreover, Norwegian said that it intends to resume cruises from U.S. ports in July, subject to CDC approval, noting that it would require that its guests and crew be fully vaccinated while maintaining other safety and health standards. So is Norwegian stock poised to rally further or is a correction looking imminent? Based on our machine learning engine, which analyzes Norwegian stocks historical price movements, the stock has a 54% chance of a rise over the next month, after rising by about 11% over the last five trading days. See our analysis on Norwegian Cruise Line Stock Chances Of Risefor more details.
So whats the longer-term outlook for NCLH stock? Although the opening up of the travel and leisure industry and pent-up demand for cruises bodes well for Norwegians revenues, the company is likely to continue burning cash for at least a few more quarters as it ramps up operations and gets its fleet sailing. Longer-term profitability also remains a concern, given potentially higher interest expenses. The companys total debt rose to about $11.8 billion at the end of 2020, up from around $6.8 billion at the end of 2019. That said, the stock still remains down by about 50% from its pre-Covid highs, making the risk to reward proposition relatively attractive for investors.
[3/8/2021] Norwegian Cruise Line