Why Norwegian Cruise Line (NCLH) Dipped More Than Broader Market Today

Norwegian Cruise Line (NCLH) closed the most recent trading day at $14.85, moving -3.51% from the previous trading session. This change lagged the S&P 500's daily loss of 0.48%. Elsewhere, the Dow saw a downswing of 0.77%, while the tech-heavy Nasdaq depreciated by 0.64%.

The cruise operator's shares have seen a decrease of 17.7% over the last month, not keeping up with the Consumer Discretionary sector's loss of 3.74% and the S&P 500's loss of 0.97%.

Analysts and investors alike will be keeping a close eye on the performance of Norwegian Cruise Line in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.89, signifying a 25.83% drop compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $2.87 billion, indicating a 2.19% decline compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.57 per share and a revenue of $10.04 billion, indicating changes of -25.59% and +2.17%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for Norwegian Cruise Line. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 4.57% lower. At present, Norwegian Cruise Line boasts a Zacks Rank of #4 (Sell).

Investors should also note Norwegian Cruise Line's current valuation metrics, including its Forward P/E ratio of 9.81. This denotes a discount relative to the industry average Forward P/E of 15.74.

Meanwhile, NCLH's PEG ratio is currently 0.77. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Leisure and Recreation Services industry was having an average PEG ratio of 1.14.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 199, positioning it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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