Investing.com -- Mizuho downgraded Norwegian Cruise Line Holdings (NYSE: NCLH) to Neutral from Outperform and cut its price target for the stock to $17 from $22 in a note on Tuesday, citing rising leverage and the risk of a funding shortfall over the next 18 months.

Analyst Ben Chaiken said the operator is working through a turnaround driven partly by "self-inflicted wounds (accelerated supply, change in customer segmentation, delays in construction, changes to personnel and adjustments to the booking-curve)," as well as macro headwinds including conflict in the Middle East and higher oil prices.

Mizuho remains constructive on the cruise sector and expects Norwegian to emerge from its turnaround successfully, but said "shares could trade sideways for the next 6-12 months, and there could be an opportunity to accumulate shares lower."

The brokerage models EBITDA rising only 2% to 3% next year. To fund operations and new ships, it believes Norwegian likely needs to draw more than $1 billion on its revolver over 18 months, alongside $2.7 billion in export credit agency debt, pushing leverage above 7 times from roughly 5.5 times at the end of 2025.

Mizuho maps out roughly $5.3 billion in cash sources against $6.6 billion of outflows, leaving a $1.3 billion gap it says could require an equity issuance if operations build slowly.

The firm also sees downside to the 2027 consensus, modeling earnings of $1.22 per share against the Street's $1.70, with higher fuel and interest costs.