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Norwegian Cruise Line (NCLH) shares pop after JPMorgan analysts upgraded the stock despite signs of weakening consumer demand. Brad Smith and Madison Mills report more on this analyst coverage on the cruise operator.
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Let's also talk a little Norwegian Cruise Line here while we have you here, Maddie. They also got an upgrade from JP Morgan analysts despite signs of weakening consumer sentiment and lower than expected retail sales. The reports saying that the company sees quote zero detectable change in demand behavior to date. Shares of Norwegian Cruise, they are higher right now by about 4%, we'll round that off too.
I think it's interesting we've been talking a lot about the wealth effect. That is this idea that the wealthiest people in the world are wealthy in part due to the stock market. When stocks are down, what happens to those wealthy consumers? Maybe they pause on spending. Maybe that's hurtful to company like Norwegian, which does see most of its brand targeting higher end income consumers. Having said that, JP Morgan still bullish here, right? Lifting their price target here and they also lifting their rating when it comes to neutral to overweight here. They talk about an incremental top line opportunity for the company. They say that the CFO did represent kind of a cautious tone on their earnings call here, talking about kind of they're not going to guide to perfection and that they are still concerned about some potential headwinds when it comes to geopolitical tensions bubbling over in the Red Sea in particular here. And given the Russia-Ukraine truce still remains in the balance. But they don't say that they're seeing any change when it comes to demand behavior. They say zero detectable change in demand behavior to date despite the noise in the macro backdrop. That is a stock that you want to own if you're someone who is concerned about that consumer spending and you're hearing JP Morgan say there's no change in consumer behavior on this stock.
Are you a cruiser? Do you do cruising?
Never. I hate the idea of a cruise. That is my worst nightmare. Trapped at sea? No, thank you.
No, no. Can't do it.
International law, maritime law? I'm not doing that. Not for me. Not for me.
I'm with you on that one. Too much water.
Exactly.
Thanks.