Benzinga - by Shivani Kumaresan, Benzinga Staff Writer.
Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) has unveiled a total of eight vessels, representing nearly 25,000 additional berths to be built across three brands.
The company also launched the construction of a multi-ship pier at Great Stirrup Cay, the company’s private island destination in the Bahamas and its Caribbean port of call.
The strategy is expected to boost Norwegian Cruise’s product offering, guest experiences, and operational infrastructure.
The new ship orders across all three brands are scheduled for delivery over a ten-year period, between 2026 and 2036.
After the delivery of four Prima-Plus class ships from 2025 through 2028, the cruise operator is expected to take delivery of four approximately 200,000-gross-ton ships, each with a capacity of nearly 5,000 guests, in 2030, 2032, 2034, and 2036.
Oceania Cruises is scheduled to take delivery of two 86,000-gross-ton ships, each with a capacity of 1,450 guests in 2027 and 2029.
Finally, Regent Seven Seas Cruises is scheduled to take delivery of two 77,000-gross-ton ships, each with a capacity of 850 guests, in 2026 and 2029.
“This strategic new-ship order across all three of our award-winning brands provides for the steady introduction of cutting-edge vessels into our fleet and solidifies our long-term growth,” said President and CEO Harry Sommer.
The company has obtained export credit financing with favorable terms to fund 80% of the contract price of each of the two Oceania Cruises and Regent Seven Seas Cruises ships.
The new pier development in the Bahamas is set to begin in summer 2024 and be completed by late 2025 with an investment of about $150 million.
Stifel analyst Steven Wieczynski reiterated a Buy rating on the shares with a price target of $25.
NCLH now has 13 ships on order over the next 12 years for a combined 41,000 berths, representing about 65% capacity growth, noted the analyst.
With a historically smaller fleet, the company has been building new ships more aggressively versus peers in order to enter/serve certain markets.
Over the next decade this will not only give NCLH the biggest growth story within the cruise industry but will also allow them to continue entering new markets with minimal cannibalization to their fleet, the analyst noted.
Owning cruise stocks when supply growth has been low for an extended period of time, as per the analyst. While the headline of eight ships might make investors panic, the analyst urged them to look at the fine print.
Overall, according to the analyst, the positives surely outweigh the negatives.
Price Action: NCLH shares are trading lower by 2.35% at $18.93 on the last check Tuesday.
Photo via Wikimedia Commons
Latest Ratings for NCLH
| Mar 2022 | Macquarie | Maintains | Outperform | |
| Feb 2022 | Deutsche Bank | Maintains | Hold | |
| Feb 2022 | Morgan Stanley | Maintains | Underweight |
View the Latest Analyst Ratings
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