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Norwegian Cruise Lines stock rises on Barclays, Truist upgrades

Yahoo Finance Live anchors discuss stock performance for Norwegian Cruise Lines after Barclays and Truist upgrade their ratings on the stock.

Video transcript

[AUDIO LOGO]

BRAD SMITH: Also here, we got to check in on shares of Norwegian Cruise Line. They've got a price target boost by Barclays. That was the first one. $14 to $16. Now, that's their new price target.

But the good news doesn't stop there. That was just the first one. Truist Securities upgrading Norwegian Cruise Line to buy from hold as booking volumes and pricing for luxury lines improve. They're seeing a look at shares moving higher by about 2% here early in the trading session.

And for the cruise line operators, they've been looking for more of the-- I don't want to say red tape, but more of the precautions to continue to be eased, especially here in the US but even more broadly on some of the destinations that they are going into it as well, because that has been so key to being able to disembark from the voyage safely and get back on, and mitigate the risk for Norwegian Royal Caribbean and Carnival of any type of transmission of virus or illness on board.

JULIE HYMAN: Yeah, and I have to cop to not knowing that Norwegian was sort of at the upper end of the market, right? But what's interesting here is that these analysts are talking about that luxury-- what we're seeing in luxury demand for cruises-- is mirroring what we're seeing in retail, for example. What we've been hearing recently from some of the higher end retailers that they are still seeing strength.

The analysts over at Truist specifically citing some figures here, saying that bookings have moderated to up mingles-- midsingle digits compared with 2019. But that's still, quote-unquote, materially stronger than the decline that we saw in June and July of 10% to 15%. So it's all relative. But on a relative basis, these guys are seeing better numbers.

BRAD SMITH: Yeah, the thesis is interesting because it certainly looks at or tries to draw a corollary between what we've seen in the high-income consumer on the retail front even, and apply that to a service business within Norwegian. And sure, yeah, there's the same appetite in terms of what we've seen in the shift of spending from goods to services over the course of the summer, there is some cyclicality to that.

But now it comes down to-- for all of these cruise line operators, but especially if you're going to make that thesis for Norwegian then it comes down to how much those bookings are gonna continuously improve in a period where people are, all right, looking towards the end of the year. Thinking about holiday shopping, spending like that. And perhaps maybe doing some early bookings for next year even.

And I guess that's where we'll have to see where Norwegian are starting to see some of those bookings and the campaigns that they've run to re-engage with so much of this really committed and enthusiastic cruise line consortium of customers, because I think that's perhaps in the experience economy, one of the most loyal type of consumers that's out there in the [? experience ?] [? kind. ?]

JULIE HYMAN: It certainly seems that way. And then they got to buy the resort wear as well to--

BRAD SMITH: Oh.

JULIE HYMAN: --go on the cruise.

BRAD SMITH: Yeah.

JULIE HYMAN: Maybe that'll hold up well. I don't know, we'll see.