Will Norwegian Cruise Line Holdings Ltd.’s (NYSE:NCLH) Earnings Grow In The Year Ahead?

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As Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) released its earnings announcement on 31 March 2019, the consensus outlook from analysts appear somewhat bearish, as a 9.6% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 25%. Currently with trailing-twelve-month earnings of US$955m, we can expect this to reach US$1.0b by 2020. Below is a brief commentary around Norwegian Cruise Line Holdings’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Norwegian Cruise Line Holdings

Exciting times ahead?

The longer term expectations from the 17 analysts of NCLH is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of NCLH’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NYSE:NCLH Past and Future Earnings, June 1st 2019
NYSE:NCLH Past and Future Earnings, June 1st 2019

This results in an annual growth rate of 11% based on the most recent earnings level of US$955m to the final forecast of US$1.3b by 2022. EPS reaches $5.69 in the final year of forecast compared to the current $4.28 EPS today. In 2022, NCLH’s profit margin will have expanded from 16% to 18%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Norwegian Cruise Line Holdings, there are three fundamental factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Norwegian Cruise Line Holdings worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Norwegian Cruise Line Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Norwegian Cruise Line Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.