Norwegian Cruise Line earns upgrade at Goldman as bullish industry trends lifts all boats

Shares of Norwegian Cruise Line Holdings (NYSE:NCLH) are getting a lift on Tuesday as the bullish outlook for the cruise industry earns the company an upgrade from Goldman Sachs to Buy from Neutral, aligning it with competitors Carnival Corporation (CCL), and Royal Caribbean Cruises (RCL).

Goldman’s Lizzie Dove sees multi-year pricing tailwinds generated by a number of factors, including: cruise demand outpacing the relatively benign supply setup in the industry; the “halo effect” from new ship launches; less discounting need to fill ships; and future land investments.

“Each of these companies is set up for significant balance sheet repair over the coming years, which should drive a continued re-rating higher from here and lead to increased interest from a broader investor base,” Dove said in Tuesday’s research note.

In tandem with her upgrade, Dove lifts her target price for NCLH by 21% to $35, and reaffirms her Buy rating for Carnival Corporation (CCL), and Royal Caribbean Cruises (RCL).

Norwegian Cruise Line Holdings (NCLH) shares are up 3% into Tuesday’s regular open, giving a lift to Carnival (CCL), and Royal Caribbean (RCL).