NCLH Stock Price

[Beezo]

Interesting - UBS upgraded NCL from neutral to buy, including inflation adjustment. 
 

https://www.seatrade-cruise.com/finance/norwegian-cruise-line-holdings-shares-rise-ubs-upgrade-buy

[oteixeira]

11 hours ago, Beezo said:

Interesting - UBS upgraded NCL from neutral to buy, including inflation adjustment. 
 

https://www.seatrade-cruise.com/finance/norwegian-cruise-line-holdings-shares-rise-ubs-upgrade-buy

Don't get too excited, the inflation numbers today will take back most of yesterdays gains.

[BermudaBound2014]

13 hours ago, Beezo said:

Interesting - UBS upgraded NCL from neutral to buy, including inflation adjustment. 
 

https://www.seatrade-cruise.com/finance/norwegian-cruise-line-holdings-shares-rise-ubs-upgrade-buy

 

I believe the change from neutral to buy by UBS is a result of the investor/analyst call that took place on October 6th. I couldn't listen into the call because my internet/reception is spotty up here at the cabin, but you can read the presentation here: https://d1io3yog0oux5.cloudfront.net/_368ea7b7c41a9480f7cbe20df820e73f/nclhltd/db/1086/11305/pdf/Prima+NYC+Investor+Event+Presentation_10-6-22_Final+for+Distribution.pdf

 

Based on everything I can see, this looks like a rah-rah meeting put forth by Del Rio and his team. Market manipulation. I can find no news to justify a change in ratings. NCLH will give Q3 in a few weeks. Certainly more rah-rah, but the documents files with the SEC will likely tell a different story.

 

 

[BermudaBound2014]

Just a fyi... Carnival just offered up another 1.25 Billion senior notes and added 12 ships to the pot to make it attractive. 

 

IMO, today's rally in stock prices could easily be because Carnival is making a move to kick the can a bit further. Of course, that's just my guess.

 

Regardless, this isn't a good look for the cruise industry. NCLH and RCL both report Q3 in a few weeks. Could CCL be trying to get ahead of the news? 

 

 

[Beezo]

Interesting indeed. 
 

Has anyone seen what percentage of FCCs for NCL have been redeemed? I believe carnival (at least Carnival cruise line proper) put an expiration on them. Maybe they are also teeing themselves up for a stronger 2023 in that sense: deplete FCCs from 2020-2022, get all ships back in service by year end (fully staffed as possible) and just close the books on a very bad year setting up 2023 with low startup costs and “free” cruise liabilities. 
 

I bring that up because when you look at Carnival Corp based on how low they have gone pricing wise, it’s literally costing them to sail each cruise on top of the interest and principle payments. I do actually agree with FDR on how they aren’t cannibalizing themselves. IF they clear 2022 and enter in 2023 as they say, I do think they can get out of this stronger, especially on stronger pricing and longer booking trends. They too just need to wrap 2022 ASAP lol

[BermudaBound2014]

Update to the news today:
 

cCL raised the offering to 2.05 Billion at a whopping 10.28%.

 

They had strong investor interest likely due to “contributing” 12 cruise ships to sweeten the deal. 

 

“In connection with the offering of the Senior Priority Notes, the Company and its subsidiaries will contribute 12 unencumbered vessels to the Issuer, with each of these vessels continuing to be operated under one of the Company's, Carnival plc's or one of their subsidiaries' brands.”

 

https://finance.yahoo.com/news/carnival-corporation-plc-announces-upsizing-230100788.html

 

Read the terms at the link above. Sure does sound like desperation to me. At this point anything to kick the can down the road and hope to ride out the storm. 

[BermudaBound2014]

NCLH reported third quarter this morning.  

 

NCLH beat the estimates which means they lost less money than was anticipated this quarter (-.64 compared to -.71). Occupancy rose to 80% and is expected to stay in that range thru the end of the year. Pre-market is responding positively.

 

 

 

https://finance.yahoo.com/news/norwegian-cruise-line-holdings-reports-123000482.html

[vacation44]

 

18 minutes ago, BermudaBound2014 said:

NCLH reported third quarter this morning.  

 

NCLH beat the estimates which means they lost less money than was anticipated this quarter (-.64 compared to -.71). Occupancy rose to 80% and is expected to stay in that range thru the end of the year. Pre-market is responding positively.

 

 

 

https://finance.yahoo.com/news/norwegian-cruise-line-holdings-reports-123000482.html

Thank you for reporting.

[At Sea At Peace]

Well, as expected, 'we loss less than we could have.  😅

 

Also, bookings in 2023 look so good, so good.  😇

 

Liquidity ~

 

"the Company’s liquidity was approximately $2.2 billion, consisting of cash and cash equivalents of $1.2 billion and a $1 billion undrawn commitment."

 

So, let's take a look-see at that considering the following ~

 

"As of September 30, 2022, the Company’s advance ticket sales balance, including the long-term portion, was $2.5 billion."

 

So, of the "Company's advance ticket sales;" i.e., Customer$ Money 😉 in the amount of $2.5 billion, we've already spent $1.3 billion. 😲

 

 

[PUNKT2]

1 hour ago, At Sea At Peace said:

Well, as expected, 'we loss less than we could have.  😅

 

Also, bookings in 2023 look so good, so good.  😇

 

Liquidity ~

 

"the Company’s liquidity was approximately $2.2 billion, consisting of cash and cash equivalents of $1.2 billion and a $1 billion undrawn commitment."

 

So, let's take a look-see at that considering the following ~

 

"As of September 30, 2022, the Company’s advance ticket sales balance, including the long-term portion, was $2.5 billion."

 

So, of the "Company's advance ticket sales;" i.e., Customer$ Money 😉 in the amount of $2.5 billion, we've already spent $1.3 billion. 😲

 

 

I mean - that's what they said was their target three months ago, so they are on pace. And the cruise business has always been a cash business of spending customer's money in advance, so that isn't anything new post-pandemic or alarming. Pre-pandemic they used to only keep about 0.25B of cash on hand, so they are actually flush with cash now! 😉 Obviously that plan didn't work out too well with the pandemic, but you can certainly undersand why a company would want to put that money to work versus just having it sitting around, waiting for a once-in-a-century event. 

 

Costs sounded higher than they want (who's aren't these days?) but the rest of the figures seem to all be trending in the right direction for what amounts to a start up getting itself out of debt. On the call the CFO said the plan was to reach the same amount of leverage they had in 2019 by 2025. Given what the industry went through, I'm honestly surprised they'd be able to do that in three years. And Royal sounded even more aggressive with their EPS being back to 2019 levels by 2025. If NCLH debt levels get back to where they were in 2019 by 2025, and they don't buy back any stock between now and then, with ~2X the shares outsanding now versus pre-pandemic, that would put the stock price around $30ish in 2-3 years time, which from where it is today is a nice annual return.

 

As a (biased) long-term holder, I was content with the messaging.

[cruiseny4life]

2 minutes ago, PUNKT2 said:

I mean - that's what they said was their target three months ago, so they are on pace. And the cruise business has always been a cash business of spending customer's money in advance, so that isn't anything new post-pandemic or alarming. Pre-pandemic they used to only keep about 0.25B of cash on hand, so they are actually flush with cash now! 😉 Obviously that plan didn't work out too well with the pandemic, but you can certainly undersand why a company would want to put that money to work versus just having it sitting around, waiting for a once-in-a-century event. 

 

Costs sounded higher than they want (who's aren't these days?) but the rest of the figures seem to all be trending in the right direction for what amounts to a start up getting itself out of debt. On the call the CFO said the plan was to reach the same amount of leverage they had in 2019 by 2025. Given what the industry went through, I'm honestly surprised they'd be able to do that in three years. And Royal sounded even more aggressive with their EPS being back to 2019 levels by 2025. If NCLH debt levels get back to where they were in 2019 by 2025, and they don't buy back any stock between now and then, with ~2X the shares outsanding now versus pre-pandemic, that would put the stock price around $30ish in 2-3 years time, which from where it is today is a nice annual return.

 

As a (biased) long-term holder, I was content with the messaging.

I'm with you on this. I'm afraid buying at the bottom was a failure for me. I waited too long as it didn't get to $10/share. Oh well. I'm leaving the naysayer camp about NCL and expecting them to perform fairly well over the next few years, barring a major recession (2008 style). 

[BermudaBound2014]

21 hours ago, cruiseny4life said:

I'm with you on this. I'm afraid buying at the bottom was a failure for me. I waited too long as it didn't get to $10/share. Oh well. I'm leaving the naysayer camp about NCL and expecting them to perform fairly well over the next few years, barring a major recession (2008 style). 

 

 

Here's the transcript from the conference call. A very interesting read for anyone interested in NCLH stock. Even NCLH is predicting they won't preform well next year.

 

I like to pay attention to the question and answer period as it's much more telling than the well prepared slide show. 

 

https://finance.yahoo.com/m/c53c730b-965a-3e3a-a550-d3a2e611c2b4/norwegian-cruise-line.html

 

 

 

[At Sea At Peace]

On 11/8/2022 at 1:59 PM, PUNKT2 said:

I mean - that's what they said was their target three months ago, so they are on pace. And the cruise business has always been a cash business of spending customer's money in advance, so that isn't anything new post-pandemic or alarming. Pre-pandemic they used to only keep about 0.25B of cash on hand, so they are actually flush with cash now! 😉 Obviously that plan didn't work out too well with the pandemic, but you can certainly undersand why a company would want to put that money to work versus just having it sitting around, waiting for a once-in-a-century event. 

 

Costs sounded higher than they want (who's aren't these days?) but the rest of the figures seem to all be trending in the right direction for what amounts to a start up getting itself out of debt. On the call the CFO said the plan was to reach the same amount of leverage they had in 2019 by 2025. Given what the industry went through, I'm honestly surprised they'd be able to do that in three years. And Royal sounded even more aggressive with their EPS being back to 2019 levels by 2025. If NCLH debt levels get back to where they were in 2019 by 2025, and they don't buy back any stock between now and then, with ~2X the shares outsanding now versus pre-pandemic, that would put the stock price around $30ish in 2-3 years time, which from where it is today is a nice annual return.

 

As a (biased) long-term holder, I was content with the messaging.

 

That is certainly true.

 

However, they weren't buried in tens of billions of debt back then, putting such customer's deposits at a relatively significantly much higher risk.

 

As with the 2008 housing and mortgage mess, we learned that it probably wasn't a good idea to sell houses and finance them to buyers who couldn't afford them.  

 

At this point, I'd be in favor of the cruise line customer deposits be segregated from operating accounts until used and protected for the customers from creditors.

 

Again, your point is correct.

[At Sea At Peace]

14 hours ago, At Sea At Peace said:

However, they weren't buried in tens of billions of debt back then, putting such customer's deposits at a relatively significantly much higher risk.

 

 

Just to add some comparative data.  Look at the debt levels, customer cash deposits and cruise line noncustomer cash 2019 versus September 30, 2022.

 

Even though their "use of customer cash" has decreased, the customer cash 'risk position' is now BEHIND $24.4 billion more in CCL debt, $14.93 billion in RCL debt and $7.85 billion in NCL debt.

 

 

 

 

 

 

[fstuff1]

1 minute ago, At Sea At Peace said:

 

Just to add some comparative data.  Look at the debt levels, customer cash deposits and cruise line noncustomer cash 2019 versus September 30, 2022.

 

Even though their "use of customer cash" has decreased, the customer cash 'risk position' is now BEHIND $24.4 billion more in CCL debt, $14.93 billion in RCL debt and $7.85 billion in NCL debt.

 

 

 

 

 

 

carnival is cash flow positive???

if not, then how are they positive cash nonconsumer deposits?

[PUNKT2]

15 hours ago, At Sea At Peace said:

 

That is certainly true.

 

However, they weren't buried in tens of billions of debt back then, putting such customer's deposits at a relatively significantly much higher risk.

 

As with the 2008 housing and mortgage mess, we learned that it probably wasn't a good idea to sell houses and finance them to buyers who couldn't afford them.  

 

At this point, I'd be in favor of the cruise line customer deposits be segregated from operating accounts until used and protected for the customers from creditors.

 

Again, your point is correct.

For sure things are far from ideal - I sure that is why NCL is keeping that line of credit open. Those debt payments are steep so the fact that they have ~$1b more of cash on hand then they normally would have pre-pandemic means nothing when you've got $7b more in debt due in the next few years.

 

My only point was, barring a significant recession, the worst seems to be past them. Some (terrible pun intended) choppy waters for the next couple of years even with record revenues, but if you got into the stock around where it is now and don't need that money for 3+ years, there are certainly worse companies to own. Short term I suspect all three are going to continue to be volatile, but I'm not a trader so as long as the general trend over the last 3-4 months continues, I'm content as a long-term investor.

[At Sea At Peace]

2 hours ago, fstuff1 said:

 

if not, then how are they positive cash nonconsumer deposits?

 

 

1.  The concept of net cash excluding customer deposits is based on the Cash balance of $7.071 billion; which includes Customer deposits of $4.470 billion, result in net cash of $2.54 billion.  This is at a POINT in time.

 

 

 

2 hours ago, fstuff1 said:

 

carnival is cash flow positive???

 

 

2.  CCL is not cash flow positive for the quarter or YTD.  Still a decrease of $1.87 billion for the 9-months ended.  That was aided by the issuance proceeds of long term debt of $3.334 billion and common stock of $1.180 billion.  This is for a PERIOD of time.  Including the prior period, their issuance of DEBT as a 'financing activity' is a + as Proceeds of debt issuance.

 

Cash flow consists of 3 components ~

 

Net cash provided by (used in) operating activities,

Net cash provided by (used in) investing activities and

Net cash provided by (used in) financing activities.

 

 

[BermudaBound2014]

If you are wondering what is going on with the stock today, Suisse just double downgraded NCLH stock.

 

Plus this:

 

Oh, and there were a couple small insider trades

 

https://www.schaeffersresearch.com/content/news/2022/11/17/transition-period-could-ding-norwegian-cruise-lines-balance-sheet

 

 

In other news, we were discussing who would buy the half built Dream from the bankrupt Genting and it looks like that will be Disney.

Edited November 17, 2022 by BermudaBound2014

[ColeThornton]

https://finance.yahoo.com/m/1124265e-1e40-395a-a77c-d252a3933ace/norwegian-cruise-stock-is-s-p.html

[fstuff1]

Ncl raising the cabin tips from $16/day to $20/day starting jan1. 😮

 

Anyway to gleam from Q1 results in April 2023 as to whether ncl is actually giving this 25% increase to the crew or keeping it as cash on hand?

 

[cruiseny4life]

10 hours ago, fstuff1 said:

Ncl raising the cabin tips from $16/day to $20/day starting jan1. 😮

 

Anyway to gleam from Q1 results in April 2023 as to whether ncl is actually giving this 25% increase to the crew or keeping it as cash on hand?

 

Wouldn't be nearly enough data as cruisers have the option of pre-paying the daily service charge on already booked cruises. I think most will do this.

[BermudaBound2014]

12 hours ago, fstuff1 said:

Ncl raising the cabin tips from $16/day to $20/day starting jan1. 😮

 

Anyway to gleam from Q1 results in April 2023 as to whether ncl is actually giving this 25% increase to the crew or keeping it as cash on hand?

 

 

Doubtful, but I like the way you think ;-).

 

CCL is doing some creative pumping. Offered extremely low deposits for Black Friday (Princess had $1 deposits, HAL had $25) to pump up their booking numbers so it looks like 2023 has 'record high bookings'. And now CCL is offering $100 OBC to passengers if they pay off their cruise in full early. I feel like something funky is in the air. 

 

 

 

 

 

 

 

[IronRobi]

On 12/8/2022 at 10:33 PM, fstuff1 said:

Ncl raising the cabin tips from $16/day to $20/day starting jan1. 😮

 

Anyway to gleam from Q1 results in April 2023 as to whether ncl is actually giving this 25% increase to the crew or keeping it as cash on hand?

 

The cruise contract states the DSC is used to fund the crew's base salaries, incentive programs and a company-wide wellness program. So unless they're also changing how it's being used, then yes the increase would be going to the crew in some way (just not as tips). Whether that be an increase in base wages, an extra day off each month, or to pay the increased costs of the wellness program there's no way to really tell. 

[cruiseny4life]

As they say, no news is good news. Today's a day full of news which means NCLH's future isn't looking so bright. There's no net profit for NCLH in 2022 and that trend will continue into the first quarter of 2023. So much for that last half of the year positive EBIDTA eh? 

 

Source: https://www.nclhltd.com/investors/sec-filings/all-sec-filings/content/0001104659-23-004834/0001104659-23-004834.pdf

 

Looks like NCLH is also looking to pay their debt due in 2024 with more debt that will be due in 2028. It's never great to finance debt payment by taking on more debt. 

 

Am I missing anything?

[BermudaBound2014]

@cruiseny4life thanks- I’m currently on a celebrity ship and missed the release. For what it’s worth, there are cuts all over celebrity also. The cruise industry is a mess. I believe shorts are still the play.