Norwegian Cruise Line Holdings Ltd. Just Released Its Yearly Earnings: Here's What Analysts Think
There's been a notable change in appetite for Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) shares in the week since its full-year report, with the stock down 10% to US$46.97. Results were roughly in line with estimates, with revenues of US$6.5b and statutory earnings per share of US$4.30. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Norwegian Cruise Line Holdings
Taking into account the latest results, the most recent consensus for Norwegian Cruise Line Holdings from 13 analysts is for revenues of US$6.91b in 2020, which is an okay 6.9% increase on its sales over the past 12 months. Statutory earnings per share are forecast to reduce 3.4% to US$4.18 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$7.08b and earnings per share (EPS) of US$4.87 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
Analysts made no major changes to their price target of US$63.20, suggesting the downgrades are not expected to have a long-term impact on Norwegian Cruise Line Holdings's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Norwegian Cruise Line Holdings analyst has a price target of US$73.00 per share, while the most pessimistic values it at US$54.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that Norwegian Cruise Line Holdings's revenue growth is expected to slow, with forecast 6.9% increase next year well below the historical 12%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 8.2% per year. So it's pretty clear that, while Norwegian Cruise Line Holdings's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Norwegian Cruise Line Holdings. Analysts also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Norwegian Cruise Line Holdings going out to 2023, and you can see them free on our platform here.
You can also view our analysis of Norwegian Cruise Line Holdings's balance sheet, and whether we think Norwegian Cruise Line Holdings is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
