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Rough Waters Ahead, But We See Value in This Cruise Line

We expect demand for cruises to meet supply in most parts of the world in the coming years, and think the market is too bearish on Norwegian.

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Jaime Katz: We recently assessed the global supply and demand profile for Carnival, Royal Caribbean, and Norwegian.

For the North American market, we expect supply could grow faster than demand in the near term. However, age demographics, the rising wealth effect, and spending preferences of the millennial cohort support faster demand growth ahead. We believe that after 2020, North America should be in a net demand position.

Jaime M. Katz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.