Norwegian Cruise Line Earnings: Cruise Demand Stays Afloat Despite Macroeconomic Waves

We don’t plan any material change to our $27 fair value estimate for no-moat Norwegian Cruise Line after digesting first-quarter results. Sales of $1.8 billion and an adjusted EPS loss of $0.30 bested our respective $1.7 billion and $0.44 loss estimates, due to as-reported yields (pricing) that ticked up 3% and well-controlled costs. Indeed, with the firm’s current 2023 net yield outlook calling for as-reported growth of 4.5%-6%, the second half should see roughly 7% pricing growth over 2019 levels. Demand momentum has persisted, with 2023 bookings and pricing at record levels, pointing to consumers' appetite to travel. With advance ticket sales jumping 26% sequentially, to $3.4 billion, we see promising implications for the summer sailing season.