Melius sees cruise lines poised for calmer waters in 3Q26 earnings

Investing.com -- Cruise line stocks are positioned for improved performance as the sector prepares to report third-quarter 2026 earnings, according to Melius analyst Conor Cunningham. After a challenging year marked by elevated Caribbean supply and disruptions from the Iran war, the industry appears ready to turn a corner.

In a note to clients dated October 12, 2026, Cunningham outlined a more favorable setup for cruise operators heading into earnings season. The analyst noted that 2026 has been a mixed year for the sector, with headwinds stemming from both macro factors and self-inflicted challenges. However, consumers are moving back toward value-oriented travel options, which positions cruise lines to resume their long-term growth objective of taking market share from other traditional forms of travel.

Valuations have become more attractive, according to the analyst, with cruise company multiples down 2.1x from their August 2025 peak based on EV/EBITDA metrics. Despite the valuation compression, estimates have fallen only modestly year-to-date, down 5.5% in aggregate for 2026. Cunningham emphasized that the key for this earnings season is not necessarily positive revisions, but rather that downward revisions stop, particularly given the easier comparisons heading into 2027.

For the third quarter, Melius expects traditional cruise operators to deliver modest beats driven by close-in demand and onboard spending that exceeds expectations. Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) has already guided ahead of expectations. For the fourth quarter, the firm anticipates that prior outlooks will be broadly reiterated despite higher fuel costs, reflecting strong underlying demand.

1. Royal Caribbean Cruises Ltd (NYSE: RCL) and Viking Holdings Ltd (NYSE: VIK) - Melius highlighted these two operators as particularly interesting opportunities. The analyst described both as best in class and noted they currently trade at a discount. Cunningham sees almost 4 points of sequential improvement at RCL from the third quarter to the fourth quarter, assuming fourth-quarter constant-currency net yields of 4.5%. If this projection proves accurate, cruise lines would return to a sizable spread between net yields and costs in 2027, supporting the long-term growth opportunity that remains intact for the sector.

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