Norwegian shares slip after Mizuho downgrade
The bank lowered its rating and price target on concerns about leverage, funding needs and operating headwinds.
Norwegian Cruise Line Holdings shares fell 2.6% in pre-open trading to $17.70 after Mizuho downgraded the cruise operator from Outperform to Neutral. The bank also cut its price target to $17 from $22.
A Mizuho analyst estimated that Norwegian could need to draw more than $1 billion from its revolving credit facility and use $2.7 billion in export credit agency debt. The analyst projected a funding shortfall of about $1.3 billion, which could require an equity issuance if the company’s operational recovery proceeds slowly.
Mizuho linked the company’s challenges to fleet supply additions, changes in customer segmentation, construction delays, personnel changes and booking-curve adjustments. The bank also cited Middle East tensions and higher oil prices as external pressures.
Based partly on expectations for increased fuel and interest costs, Mizuho estimated Norwegian’s 2027 earnings per share at $1.22, below the Wall Street consensus of $1.70. Separately, UBS raised its price target for Norwegian to $20 from $17 while keeping a Neutral rating.
