In the latest trading session, Norwegian Cruise Line (NCLH – Free Report) closed at $20.69, marking a +1.42% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 1.77% for the day. On the other hand, the Dow registered a gain of 1.42%, and the technology-centric Nasdaq increased by 2.28%.
Prior to today’s trading, shares of the cruise operator had lost 15.39% over the past month. This has lagged the Consumer Discretionary sector’s loss of 6.56% and the S&P 500’s loss of 5.73% in that time.
The investment community will be paying close attention to the earnings performance of Norwegian Cruise Line in its upcoming release. The company is expected to report EPS of $0.09, down 43.75% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.15 billion, down 1.91% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.10 per share and revenue of $10.21 billion. These totals would mark changes of +15.38% and +7.69%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Norwegian Cruise Line. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there’s been a 1.37% rise in the Zacks Consensus EPS estimate. Norwegian Cruise Line is currently a Zacks Rank #3 (Hold).
From a valuation perspective, Norwegian Cruise Line is currently exchanging hands at a Forward P/E ratio of 9.7. Its industry sports an average Forward P/E of 18.8, so one might conclude that Norwegian Cruise Line is trading at a discount comparatively.
It’s also important to note that NCLH currently trades at a PEG ratio of 0.27. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. Leisure and Recreation Services stocks are, on average, holding a PEG ratio of 1.15 based on yesterday’s closing prices.
The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 27% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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