Norwegian Cruise Line Holdings announced a secondary offering of 40 million common shares. The cruise line operator priced the offering at $20.80 per share, reflecting a 5.7% discount to the stock’s closing price on Nov 17.
Norwegian Cruise (NCLH) said that the net proceeds from the offering will be used for general corporate purposes. Barclays and J.P. Morgan are acting as the underwriters for the offering. The company anticipates offering to close on Nov 20.
On Nov. 9, Norwegian Cruise posted weaker-than-expected 3Q results. It reported an adjusted loss per share of $2.35 compared to the adjusted EPS of $2.23 in the year-ago quarter. Moreover, its 3Q loss was higher than analysts’ expectations of a loss per share of $2.25. (See NCLH stock analysis on TipRanks).
Despite weak 3Q performance, J.P. Morgan analyst Brandt Montour raised the stock’s price target to $25 (13.3% upside potential) from $22 and reiterated a Buy rating. In a note to investors, Montour said that positive vaccine news removes a “significant amount of tail-risk from shares.”
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 4 Buys, 4 Holds and 1 Sell. The average price target stands at $20.56, implying downside potential of about 6.8% to current levels. Shares have declined by about 62.2% year-to-date.
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