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Wells Fargo Starts Norwegian Cruise Line Hodings (NCLH) at Outperform

February 27, 2013 8:24 AM EST Send to a Friend
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Price: $33.54 +2.38%

Rating Summary:
    11 Buy, 4 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 20 | Down: 27 | New: 8
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Wells Fargo initiates coverage on recent IPO Norwegian Cruise Line Hodings (NASDAQ: NCLH) with a Outperform rating and $35-$37 valuation range.

The firm comments, "(1) NCLH's opportunity to further drive industry-leading net yield growth, onboard spending yields, EBITDA margin, and return on invested capital (ROIC) from an improving fleet mix (two Breakaway-4,000 berth ships and two Breakaway Plus–4,200 berth class ships by Q1 2017 to an existing base of 11 ships), (2) NCLH’s high exposure to the strongest global geographic market, North America, and (3) positive implications of 3-5% global industry capacity growth through 2016E. We believe these dynamics should fuel 40+% EPS growth in 2013E and 2014E, EBITDA margin approximating 30%, and ROIC of about 10.5% in 2014E, all supporting a premium valuation relative to larger competitors CCL and RCL of approximately 10-16% on an enterprise value (EV)-to-EBITDA basis to our 2014 estimates."

NOTE: A number of firm's launched coverage today as the quiet period ends. The ratings are coming in mixed-to-positive

For an analyst ratings summary and ratings history on Norwegian Cruise Line Hodings click here. For more ratings news on Norwegian Cruise Line Hodings click here.

Shares of Norwegian Cruise Line Hodings closed at $30.21 yesterday.




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