Up 27% Over The Last Month, Will Norwegian Cruise Line Stock Rally Further?

NCLH: Norwegian Cruise Line logo
NCLH
Norwegian Cruise Line

Norwegian Cruise Line stock (NYSE:NCLH) has gained about 27% over the past month (about 21 trading days) compared to the S&P 500 which has gained just about 1% over the same period.  Although economic headwinds also mount as the Federal Reserve raises interest rates with consumer spending remaining weak, there are multiple factors helping Norwegian stock. Firstly, interest in cruises has remained strong, with operators reporting that bookings largely trend above historical pre-pandemic levels, with pricing also remaining strong. Norwegian also has an added advantage in this environment, as it primarily caters to U.S. customers (about 80% of its passengers) who are likely to benefit from a strong dollar. Separately, the company might be a bit better insulated against the current macro issues, given its focus on more affluent customers and premium cruises. The company has also removed all Covid-19 testing, masking, and vaccination requirements on ships of its namesake brand, indicating that the pandemic-related issues are now firmly behind the industry.

However, now that NCLH stock has seen a gain of about 27% over the last month, will it continue to rally in the near term, or is a recovery imminent? Going by historical performance, there is a roughly 39% chance of a rise in NCLH stock over the next monthOut of 56 instances in the last 10 years that NCLH stock saw a twenty-one-day rise of 27% or more, 22 of them resulted in NCLH stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 22 out of 56, or about a 39% chance of a rise in NCLH stock over the coming month, implying that the stock doesn’t look attractive for the near term. See our analysis of Norwegian Cruise Line Chance of A Rise for more details.

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Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years’ data

  • After moving 2.5% or more over five days, the stock rose in the next five days on 51% of the occasions.
  • After moving 13% or more over ten days, the stock rose in the next ten days on 47% of the occasions.
  • After moving 27% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 39% of the occasions.

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 Returns Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NCLH Return 0% -18% -60%
 S&P 500 Return -3% -21% 68%
 Trefis Multi-Strategy Portfolio -4% -25% 195%

[1] Month-to-date and year-to-date as of 11/7/2022
[2] Cumulative total returns since the end of 2016

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