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NCLH Stock Has Risen 24.9% in a Month. Will the Rally Continue?

Simon Mugo trader
Updated 31 Oct 2022

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Key points:

  • NCLH stock has risen 24.9% in the past month amid positive sentiment.
  • The firm removed all its COVID-related restrictions earlier this month.
  • In addition, the company’s finances are more stable than its rivals.

The Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) stock price has risen by 24.9% in the past month, driven by positive investor sentiment as bookings soared. In addition, the cruise ship operator lifted all COVID-related protocols on its ships earlier in the month, triggering the rally higher.

According to the Norwegian Cruise Lines CEO, Frank Del Rio: “COVID today is not what it was two years ago. Society has spoken and has determined we want to get back to normal. I think that having any kind of protocol today is a hindrance to business. We are all in a hurry to get back to business as normal, we are making great strides, and we think the last move we could make to facilitate that back to normalcy is removing all the protocols.”

Also read: Five Best Shares For Beginners To Watch In 2022.

The company reassured investors that it would generate record-breaking revenues in 2023, accompanied by high profits, as its customers enjoy unrestricted vacations aboard its vessels. Furthermore, the cruise ship operator told investors it saw a significant booking surge after lifting the vaccination mandate in August this year.

Del Rio said that that reaction led to its latest decision to lift all COVID-related protocols, including mandatory testing of non-vaccinated guests. It expects the same to have a ripple effect in its business.

Analysts at UBS upgraded NCLH stock from hold to Buy, saying that its shares could rally up to 30% as bookings improved combined with much higher prices as customers were willing to pay more for cruises now compared to the pre-pandemic period.

The analysts were right, given that NCLH stock is now up 25%. However, most investors are now waiting for the cruise ship operator to post its latest earnings results, which are scheduled for release on Tuesday, November 8, 2022, at 7:30 a.m.

Unlike its competitor Carnival, which has been issuing new equity and debt to raise money for its debt repayments, Norwegian is confident that it can repay its debts and interest using its cash flow and earnings. The company had $12.2 billion in long-term debt at the end of Q2.

*This is not investment advice.

NCLH stock price.

NCLH stock price 31-10-2022
Source: Tradingview

The NCLH stock price has risen 24.89% in the past month amid positive investor sentiment. What’s next?

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading