Investors were treating cruise stocks like sinking ships in late summer. But the latest earnings results show travelers haven't given up on seaborne vacations, and analysts see gains ahead for the stocks.
Both Royal Caribbean Group and Norwegian Cruise Line Holdings delivered third-quarter results ahead of expectations this week, coming on the heels of Carnival Corp.'s robust report in late September.
Investors had been concerned about cruise lines in general because of the energy price spike: Not only do ships require oodles of fuel, but higher gasoline prices crimp consumers' discretionary budgets. The underlying cause of energy inflation, the Iran war, was a worry in itself in terms of some sailing itineraries, while historically low levels in European rivers also hurt Viking Holdings' stock, as it's known for its river cruises on the continent.
A hantavirus outbreak earlier this year didn't help the industry either.
But this week's crop of results show that despite concerns about the industry, demand remains strong.
Travel in general has proven resilient -- United Airlines highlighted total revenue per available seat-mile grew at its highest quarterly rate since the pandemic when it reported last week, while Marriott stock notched its longest winning streak since 2019 earlier this month.
Cruises can sometimes provide better value than land-based vacations, which makes them a better option for budget-conscious travelers, and easily accommodate multigenerational trips -- a key advantage when grandparents are increasingly footing the bill.
Royal Caribbean is the favorite of the three major cruise lines and it's not hard to see why: It's the only one trading above its prepandemic share price, has been a consistent performer, and Wall Street is warming to its investment in Sandals.
"While 2026 has had its fair share of curveballs, Royal is still poised to grow earnings per share by about 14%," wrote William Blair analyst Sharon Zackfia, explaining her bullish stance on the stock after this week's earnings. "[S]tructural factors will continue driving healthy growth including...a bigger and deeper competitive moat from past and future investments in industry-leading innovative ships and owned destinations."
Norwegian hasn't fared as well, but even skeptics like Truist Securities analyst C. Patrick Scholes, who's sidelined on the stock, saw clear positives, particularly in the company's 2027 net yield guidance (used to measure pricing power, as excludes variable costs like commissions and transportation). Norwegian expects the metric to grow between 1% and 2%, slightly above the 0.9% consensus estimate, and "it has been a long time since nearly any type of guide at earnings for Norwegian has been better than consensus expectations," he writes.
All three major cruise line stocks, along with Viking, are up for the week thanks to the post-earnings bumps.
Although oil will remain an overhang as long as prices remain elevated, at least this might put to rest some worries that have acted like an anchor on the group.
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