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Analysts told investors that while the firm is bullish following July cruise demand trends, they are less so on cruise stocks due to the huge outperformance.
“From conversations with senior executives at very large travel agencies that specialize in cruises and from examining “big data” on future bookings and pricing, it remains very clear to us that the industry is on a strong path to recovery: That is undeniable, in our opinion, from our conversations and data,” said the analysts.
“That all said, and perhaps to nitpick in light of the exceptional performance of the stocks over the past two months as investor expectations have elevated, we did not observe a second derivative’ additional leg-up’ in forward booking and pricing trends from our prior observations,” they added.
They said the share price outperformance of cruise stocks year-to-date is due to the above positive cruise demand trends.
“At this juncture we see cruise equities far closer to a theoretical “fair value” than when we became more positive on the sector last,” the analysts stated. While the firm is pushing out its target year to 2025 from 2024 and raising estimates, which subsequently raises all of its price targets for cruise line stocks, they “struggle to get significant upside on any of the stocks/sector and take a more ‘Neutral’ sector stance.”
