投资者原本认为，过去几年炙手可热的邮轮股会像许多面向消费者的公司一样，因消费者支出减少的警告而遭遇困境，毕竟许多消费者都在观望特朗普政府的政策将如何影响市场。High-income clients of cruise operators are completely indifferent to various "noises" in the macroeconomic context.
If you have money and want to go on a cruise vacation, it seems that you do not really care about the impact tariffs may have on the economy or the selling spree on Wall Street.
At least, this was the message conveyed by cruise operators at a conference held by JPMorgan last week.
Investors initially thought that the hot cruise stocks of the past few years would encounter difficulties like many consumer-facing companies due to warnings about reduced consumer spending, especially as many consumers were waiting to see how the Trump administration's policies would impact the market.
Airlines warned last week that they are facing a decline in leisure travel demand, so it seems logical to speculate that cruise companies may be similarly affected.
However, the reality is that as of last Friday, the stock price of Norwegian Cruise (NCLH.N) had fallen for seven consecutive weeks, with a cumulative drop of 30%, marking the longest streak of losses since March 20, 2020, at the peak of COVID-19 panic. Meanwhile, the stock price of Royal Caribbean (RCL.N) has also dropped 23% from its historical closing price of $274.79 on January 30.
However, on Monday of this week, the stock price of Norwegian Cruise rebounded by 4.4%, Royal Caribbean's stock price rose by 3.5%, and Carnival Cruise (CCL.N) saw a nearly 5% increase.
Matt Boss, an Analyst at JPMorgan, upgraded the rating for Norwegian Cruise from "neutral" to "Shareholding," and set a Target Price of $30, indicating a 51% upside from last Friday's closing price. He also reaffirmed the "Shareholding" rating for Royal Caribbean, with a Target Price of $298, suggesting an upside of about 41%.
Bose stated that the management of Norwegian Cruise believes that despite the "noise" in the macroeconomic environment, demand remains stable, with "no detectable changes."
In a report to clients, Bose pointed out that key Indicators, including the following aspects, have not shown any abnormal changes:
Booking trends do not show irregular patterns; onboard Consumer spending has not declined, including discretionary spending categories such as spas and casinos; and the cancellation rate remains unchanged.
As for Royal Caribbean, the company's management stated that there has been no change compared to the "extremely optimistic" outlook released less than two weeks ago on Investor Day.
Why can cruise Operators withstand the macroeconomic "noise"?
Firstly, their high-income clientele is more resilient to market uncertainties. The average household annual income of Norwegian Cruise customers exceeds $0.2 million, while Royal Caribbean's customer household annual income is over $0.125 million.
Secondly, for those consumers worried about expenses, Norwegian Cruise stated that its cruise vacations are 30% to 35% cheaper compared to land vacations, while Royal Caribbean's cruises are 20% to 25% cheaper.
Moreover, it is now easier to attract customers than in the past. Royal Caribbean noted that currently, 90% of adults have an open attitude towards cruise vacations, compared to only 60% to 70% before the pandemic.
Finally, the cruise market's share in the entire leisure market remains low, only about 3% to 4%. Boss believes this indicates that the cruise Industry still has significant growth potential.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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