Cruise Stock Sinks After Extended Voyage Suspensions

The shares of Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) are down 7.8% at $19.32 this morning, after the cruise company announced that due to the COVID-19 crisis, it would extend the suspension of its voyages through the end of September and cancel its Canada and New England sailings through October. As a result, NCLH was the most heavily traded stock on the New York Stock Exchange (NYSE) before the bell, and is already the biggest loser on the S&P 500 (SPX) this year.

The coronavirus pandemic brought particularly harsh headwinds to the cruise industry, with workers still stuck at sea as ports turn them away. On the charts, NCLH has distanced itself from the mid-March lows near the $7 level, which was a steep decline from its pre-pandemic two-year peak of $59.78 in January. Though the equity has tacked on 77% for the quarter, the rally has been turned away at its 100-day moving average, and NCLH remains down 64% year-over-year.

Analysts are certainly not clamoring to come aboard the equity just yet, with six of the 11 in coverage carrying a tepid "hold" or worse recommendation. Meanwhile, the 12-month consensus target price of $17.04 is a whopping 12.4% discount to current levels. Among short sellers, short interest is building, up 47.9% in the past two reporting periods. The 42.83 million shares sold short now represent roughly 20% of the stock's available float.