Redburn analyst Alex Brignall upgraded Norwegian Cruise Line to Buy from Neutral with a $25 price target. The fundamental investment case for the cruise lines of strong secular growth and margin opportunity “is clear,” the analyst tells investors in a research note. Even a 10% reduction in hotel rates and 3% annual cruise pricing growth across through 2027 would still leave cruise prices at a wider discount than in 2019, says the firm. Reburn sees margin opportunity from falling distribution costs, driven by a shift online. It upgraded both Carnival and Norwegian to Buy, retaining Royal Caribbean at Neutral. Royal has outperformed, driven by excellent execution and strong Caribbean pricing, where it over-indexes, says Redburn.
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