Cruise stocks took a plunge on Feb. 20 as Commerce Secretary Howard Lutnick warned of a potential tax crackdown under President Donald Trump’s administration. His remarks about the industry’s foreign-flagged ships and perceived tax advantages rattled investors, leading to steep declines in share prices for several cruise companies. The sudden drop reflected growing fears that the cruise industry’s tax status could face significant changes.
Analysts at Stifel, however, view this storm as nothing but a “massive overreaction.” Led by Steven Wieczynski, analysts argue that over the past 15 years, similar political threats have failed to materialize into policy changes. With the cruise industry’s tax structure deeply intertwined with the much larger cargo sector, Stifel sees a long-shot scenario for meaningful reform. Instead, the investment firm is calling the dip a golden opportunity to snap up shares of these three cruise stocks.
Cruise Stock #1: Royal Caribbean
Florida-based Royal Caribbean (RCL) is a leader in the vacation industry, boasting a global fleet of 67 ships across all seven continents. With best-in-class brands like Royal Caribbean, Celebrity Cruises, and Silversea, along with unique land-based escapes such as Perfect Day at CocoCay, the company delivers unforgettable vacations.
Valued at around $64.1 billion by market cap, shares of this cruise company have delivered a stunning return of nearly 100% over the past 52 weeks.
On Feb. 12, the company delighted investors with a hefty 36% boost to its quarterly dividend, raising it to $0.75 per share. Adding to the excitement, the Board of Directors also greenlit a share repurchase program of up to $1 billion over the next 12 months, signaling confidence in the company’s financial strength and commitment to delivering shareholder value. Moreover, shares of the cruise operator closed up 12% on Jan. 28 after the company dropped its strong Q4 earnings report.
Revenue for the quarter climbed 13% year-over-year to $3.7 billion, nearly matching Wall Street predictions, while adjusted EPS of $1.63 demonstrated an impressive 30.4% annual growth and blew past estimates by about 8.7%. As of Dec. 31, 2024, Royal Caribbean maintained a liquidity position of $4.1 billion, including cash, cash equivalents, and available credit, underscoring its financial strength and strategic flexibility.
Looking ahead to fiscal 2025, management remains highly optimistic as the company’s commercial and vacation experiences momentum accelerates amid growing demand for its top-tier brands. The company anticipates adjusted EPS for the entire year to land between $14.35 and $14.65. By comparison, analysts tracking Royal Caribbean project the company’s bottom line to grow 26.3% year over year to $14.90 per share in 2025.
Wall Street also appears largely bullish about RCL stock, with a consensus “Strong Buy” rating. Of the 21 analysts offering recommendations, 15 advise a “Strong Buy,” one gives a “Moderate Buy,” and the remaining five maintain “Hold.”
The average analyst price target of $283.45 indicates 19% potential upside from the current price levels, while the Street-high price target of $330 suggests that RCL could rally as much as 38.6% from here.
Cruise Stock #2: Carnival
Headquartered in Florida, Carnival (CCL) has been transforming vacations since 1972. With a fleet of over 90 ships, Carnival’s dynamic portfolio of world-class cruise lines delivers unforgettable experiences.
Presently commanding a market cap of roughly $27.3 billion, Carnival has outperformed the broader market over the past year, posting gains of almost 54%.
Carnival posted its Q4 earnings report last December, which sailed well beyond Wall Street’s bottom line expectations. The cruise giant achieved record revenue of $5.9 billion, a solid 10% increase from the prior year and right in line with analyst forecasts.
Plus, the company’s adjusted EPS of $0.14 not only crushed estimates by a stunning 75% margin but also reflected a dramatic turnaround from the year-ago quarter’s loss of $0.07 per share. Carnival closed out the fourth quarter with a record-breaking $6.8 billion in customer deposits, surpassing the prior record of $6.4 billion set in the same period last year.
The impressive growth reflects robust demand, bolstered by higher ticket prices and a surge in pre-cruise onboard sales, setting a strong foundation for continued momentum. For 2025, the company is charting a strong course, forecasting net yields to rise about 4.2% over record 2024 levels. Management anticipates adjusted net income to come in at $2.3 billion, reflecting 20% annual growth, while adjusted EBITDA is expected to hit $6.6 billion.
Analysts tracking Carnival project the company’s profit to jump 23.4% year over year to $1.78 per share in 2025 and rise another 18% to $2.10 per share in 2026.
CCL stock has a consensus “Strong Buy” rating on Wall Street. Of the 23 analysts covering the stock, 17 advise a “Strong Buy,” one recommends a “Moderate Buy,” four suggest “Hold," and the remaining one maintains a “Strong Sell.”
The average analyst price target of $29.35 indicates 24.9% potential upside, while the Street-high price target of $35 suggests that CCL could rally as much as 49% from here.
Cruise Stock #3: Norwegian Cruise Line
With its headquarters in Florida, Norwegian Cruise Line (NCLH) is a global cruise powerhouse, offering world-class experiences through its Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. With 32 ships and approximately 66,500 berths, NCLH sails to nearly 700 destinations worldwide. Plus, with plans to add 13 new ships by 2036, the company is primed for exciting growth and adventure.
Valued at $10.4 billion by market cap, shares of this cruise company have soared beyond the broader market’s returns over the past year, delivering gains of about 21%. In fact, over the past six months alone, the stock is up nearly 26%.
Recently, on Feb. 27, Norwegian Cruise revealed its Q4 earnings results, which beat both Wall Street’s top- and bottom-line forecasts. The company generated record Q4 revenue of $2.1 billion, up 6.2% from the same period in 2023 and slightly ahead of analysts’ forecasts. The company’s bottom-line performance was even more impressive, with adjusted earnings of $0.26 per share, reflecting a stunning turnaround from a loss of $0.18 per share and smashing expectations by a whopping 142.8% margin.
This standout performance was fueled by strong revenue growth and disciplined cost management. As of Dec. 31, 2024, the company had total debt of $13.1 billion and net debt of $12.9 billion. Liquidity remained robust at $2 billion, bolstered by $190.8 million in cash and cash equivalents, $955 million in availability under its revolving loan facility, a $650 million undrawn backstop, and additional commitments.
Looking ahead to 2025, the company projects adjusted EBITDA to reach $2.72 billion, reflecting an 11% year-over-year increase. In addition, Norwegian anticipates delivering an adjusted net income of roughly $1.07 billion, boosting adjusted EPS by 13% year-over-year to $2.05. Meanwhile, analysts tracking Norwegian Cruise project the company’s profit to rise 10.4% year-over-year to $1.81 per share in 2025 and grow another 30.4% to $2.36 per share in 2026.
Overall, Wall Street remains optimistic about NCLH stock, maintaining a consensus rating of “Moderate Buy.” Of the 18 analysts offering recommendations, 10 advise a “Strong Buy,” seven advocate “Hold,” and the remaining one analyst maintains a “Strong Sell.”
The average analyst price target of $30.21 indicates 27.4% potential upside, while the Street-high price target of $36 suggests that NCLH could rally as much as 51.8% from here.
