Earnings Update: Here's Why Analysts Just Lifted Their Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) Price Target To US$28.59

Investors in Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) had a good week, as its shares rose 9.8% to close at US$27.32 following the release of its quarterly results. Norwegian Cruise Line Holdings reported US$2.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.95 beat expectations, being 2.6% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting 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 17 analysts is for revenues of US$10.2b in 2025. If met, it would imply a decent 9.1% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 56% to US$1.94. In the lead-up to this report, the analysts had been modelling revenues of US$10.1b and earnings per share (EPS) of US$1.88 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.7% to US$28.59. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Norwegian Cruise Line Holdings at US$32.00 per share, while the most bearish prices it at US$19.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Norwegian Cruise Line Holdings' revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2025 being well below the historical 23% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Norwegian Cruise Line Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Norwegian Cruise Line Holdings' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Norwegian Cruise Line Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Norwegian Cruise Line Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Norwegian Cruise Line Holdings going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Norwegian Cruise Line Holdings (of which 1 makes us a bit uncomfortable!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.