Norwegian Cruise Line Stock Gets a Downgrade. Goldman Sees a Storm Coming.

Norwegian Cruise Line Holdings has underperformed its peers this year. (Photograph by Dimitrios Kambouris/Getty Images for Norwegian Cruise Line)

Key Points

• Goldman Sachs downgraded Norwegian Cruise Line Holdings to Neutral from Buy, lowering its price target to $21 from $23.
• Norwegian Cruise Line stock fell 1.8% to $18.76 early Tuesday and is down 27% this year, underperforming rivals.
• Norwegian cut its net yield outlook for the fourth quarter, expecting growth of 3.5% to 4%.

Norwegian Cruise Line Holdings stock fell early Tuesday after catching a downgrade. Goldman Sachs sees choppy waters ahead for the cruise operator.

The bank’s analysts downgraded the stock to Neutral from Buy, lowering their target for the stock its price target to $21 from $23. They cited Norwegian’s exposure to the Caribbean market, which has been hit by oversupply concerns.

“We see a less favorable risk-reward for 2026, driven primarily by the supply/demand setup in the Caribbean and Norwegian’s outsized exposure to that market,” analysts led by Lizzie Dove said. The cruise operator is shifting a significant amount of capacity to the Caribbean at a “rate that far outpaces industry growth,” so she sees a risk that its financial performance won’t meet Wall Street’s expectations, she said.

Norwegian didn’t immediately respond to a request for comment.

At the same time, they upgraded smaller rival Viking Holdings to Buy, saying the luxury cruise operator’s higher-income customer base has helped it offset weakness in the overall cruise market. They raised their price target to $78 from $66.

Viking rose 1.4% to $67.58 early Tuesday, bringing its gain for 2025 to 53%.

Norwegian Cruise Line stock initially fell 2% before recovering to trade 0.5% lower at $19 early Tuesday. It is now down 26% this year, while its rivals Royal Caribbean and Carnival are up 7% and 2%, respectively.

Norwegian shares plummeted more than 15% on Nov. 4 after the company reported its third-quarter results. Earnings per share exceeded expectations, but revenue missed estimates, although it reached a record.

Significantly, Norwegian cut its forecast for net yield—a metric tracking its pricing performance—expecting growth of 3.5% to 4% in the fourth quarter. Chief Financial Officer Mark Kempa said this reflected the company’s “deliberate decision to welcome more families while taking a slight trade-off on price.”

Goldman analysts said they expected continued volatility in cruise stocks and that the first and second quarters of next year will be “the low point for net yields” for Royal Caribbean and Norwegian.

They maintained a Buy rating on Royal Caribbean but warned of near-term weakness, reducing their price target to $275 from $334. The stock edged 0.4% lower to $251.33 Tuesday.

Write to Callum Keown at callum.keown@dowjones.com