Why Is Norwegian Cruise Line (NCLH) Stock Rocketing Higher Today

What Happened?

Shares of cruise company Norwegian Cruise Line (NYSE:NCLH) jumped 9.6% in the afternoon session after its peer, Royal Caribbean Cruises, reported strong full-year guidance, which lifted the entire cruise sector. 

Royal Caribbean forecasted its full-year adjusted earnings per share to be between $17.70 and $18.10, a range that was stronger than analysts had expected. This optimistic outlook was supported by powerful demand for cruise vacations. The company noted that it had seen the seven highest booking weeks in its history and had already booked about two-thirds of its cruise capacity for the year at record rates. The strong performance and bright forecast from a major industry player created positive sentiment for the whole cruise line business, boosting shares of competitors like Norwegian.

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What Is The Market Telling Us

Norwegian Cruise Line’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 23 days ago when the stock gained 5% on the news that a federal appeals court blocked Hawaii from implementing a new climate change tax on cruise passengers. 

The tax, referred to as a 'green fee,' was set to take effect on January 1 and would have added between 11% and 14% to the cost for passengers cruising in Hawaii. The ruling temporarily halted the law's enforcement while the appeals process continues. This decision came after the Cruise Lines International Association challenged the tax, arguing it violated the U.S. Constitution and federal laws. Adding to the positive news, the company's Oceania Cruises brand unveiled redesigned suite accommodations for its new Oceania Sonata ship, which is scheduled to debut in August 2027.

Norwegian Cruise Line is flat since the beginning of the year, and at $22.74 per share, it is trading 21.8% below its 52-week high of $29.07 from January 2025. Investors who bought $1,000 worth of Norwegian Cruise Line’s shares 5 years ago would now be looking at an investment worth $1,004.

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