Travel-related stocks are pinned down on Tuesday as heightened tensions between the EU and U.S. over Greenland fuel a risk-off trade and serve as a reminder of how quickly geopolitical tensions can erode risk appetite for travel-exposed names.
The move lower within the cruise sector was amplified by a pair of price target reductions for Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean (RCL) given the risk of increased promotional activity during “Wave Season.”
“Our work points to a step-up in promotional intensity January-to-date, with Wave Season-related promotions beginning & ending at varying lengths for brands and at varying promotional rates/depth creating a more competitive landscape among brands to capture demand from consumers who may be ‘holding off’ to wait for the best deals,” Matthew Boss of J.P. Morgan said in a note to clients reflecting a -30% price target adjustment for Norwegian Cruise Lines (NCLH) to $28.
At the same time, Stifel’s Steven Wieczynski is “somewhat nervous” heading into Royal Caribbean’s (RCL) 2026 guidance scheduled for next week. While the analyst isn’t worried about RCL’s business or that demand is fading, rather that investor expectations for how RCL will initially guide for 2026 is “aggressive/backwards.”
“It wouldn’t surprise us if RCL’s initial guidance underwhelms and the shares experience a near-term correction,” Wieczynski says, lowering his price target by 5% to $380.
Consequently, the backdrop continues to weigh on the cruise sector, deepening a multi-day sell-off.
Norwegian Cruise Lines (NCLH), Royal Caribbean (RCL) and Carnival Corp (CCL) are all down for six consecutive days, while Viking Holdings (VIK) is in the red for a fifth straight day.