Carnival vs. NCLH: Which is the Best Cruise Stock to Buy Now?

Carnival Corporation & plc CCL and Norwegian Cruise Line Holdings Ltd. NCLH are both navigating a new phase of growth driven by strong demand, disciplined execution, and ambitious destination strategies. Carnival recently surged to a new 52-week high, reflecting investor confidence in its accelerating momentum, while Norwegian Cruise continues to push forward with a measured, ROI-focused growth plan. But for investors seeking exposure to the cruise recovery, which stock offers the better buy right now? Let’s take a closer look.Reasons to Be Bullish on CarnivalCarnival’s ongoing transformation into a destination-led cruise model bodes well. By investing heavily in exclusive private islands and enhancing its fleet with modern, experience-driven ships, the company is creating differentiated vacation products that command stronger yields. Early signs of this strategy are encouraging, with yields climbing 6.5% year over year in the second quarter and EBITDA margins reaching their highest levels in nearly two decades.The launch of Celebration Key adds a unique growth lever. Designed to host more than 2 million guests annually, the Caribbean lagoon destination will anchor Carnival’s Paradise Collection, which also includes the reimagined Half Moon Cay and Mahogany Bay. These exclusive properties provide a differentiated alternative to land-based vacations, deepen customer loyalty and are expected to meaningfully lift yields in the years ahead.Carnival has also been investing in programs to strengthen its fleet and brand experience. The AIDA Evolution initiative is upgrading seven ships with new dining, wellness and entertainment concepts, while upcoming Excel-class ships like Carnival Festivale and Carnival Tropicale will expand family-friendly offerings, including large waterparks and interconnecting cabins. Together with the launch of Star Princess, these additions point to a refreshed portfolio designed for both scale and guest satisfaction.Financially, Carnival is demonstrating disciplined execution. The company prepaid $350 million in debt, refinanced $7 billion on favorable terms, and improved its net debt-to-EBITDA ratio to 3.7x, just one notch shy of investment grade. Customer deposits also hit a record high, supporting future cash flow visibility. By meeting its 2026 transformation targets — EBITDA per ALBD growth, ROIC, and carbon intensity reduction — 18 months ahead of schedule, Carnival has created a stronger financial foundation to support growth.With shares recently reaching a new 52-week high, Carnival’s turnaround is resonating with investors. The company’s combination of destination-led growth, operational discipline and balance sheet repair points to durable momentum as it enters the next leg of its recovery.Reasons to Be Bullish — and Cautious — on NCLHNorwegian Cruise continues to advance its “Charting the Course” strategy, aimed at balancing return on investment with return on experience. The company is pursuing measured capacity growth, high-impact destination enhancements and premium product offerings to strengthen its competitive position.The transformation of Great Stirrup Cay is central to this strategy. The upcoming Great Tides Waterpark, opening in 2026, is expected to host more than 1 million guests in its first year and deliver a meaningful yield uplift by 2027. Combined with new amenities such as Horizon Park and the Vibe Shore Club, the island is being repositioned as a multi-generational destination that deepens guest engagement and drives incremental onboard revenue.At the same time, Norwegian is expanding its presence in the luxury and ultra-luxury segments. The delivery of Oceania Allura and record bookings for Regent’s Seven Seas Prestige highlight strong demand for premium cruising. With 13 ships on order through 2036, NCLH is targeting a measured 4% capacity CAGR across its brands, ensuring disciplined growth while enhancing fleet mix.The company is also making strides in cost efficiency. A multi-year program targeting over $300 million in savings by 2026 has kept adjusted cruise costs essentially flat in 2024 and 2025, providing leverage to margin expansion. Investments in digital platforms, marketing and brand positioning are further supporting top-line momentum and future yield growth.However, Norwegian Cruise faces near-term earnings pressure from FX volatility, softer demand for certain European itineraries, and elevated leverage levels. These factors may weigh on its profitability in the near term.How Does Zacks Consensus Estimate Compare for CCL & NCLH?The Zacks Consensus Estimate for Carnival’s fiscal 2025 sales and EPS suggests year-over-year increases of 5.9% and 40.9%, respectively. In the past 60 days, earnings estimates for fiscal 2025 have risen 1%.CCL Earnings Estimate TrendImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Norwegian Cruise’s 2025 sales and EPS suggests year-over-year increases of 6.1% and 12.6%, respectively. In the past 60 days, earnings estimates for 2025 have increased 1%.NCLH Earnings Estimate TrendImage Source: Zacks Investment ResearchValuation and Price Performance: CCL vs. NCLHCarnival stock has rallied 50.8% in the past six months, significantly outpacing its industry and the S&P 500’s rise of 19.4% and 17.4%, respectively. Meanwhile, Norwegian Cruise shares have gained 32.9% in the same time.CCL & NCLH Stock’s Six-Month Price PerformanceImage Source: Zacks Investment ResearchCarnival is trading at a forward 12-month price-to-earnings (P/E) ratio of 14.20, below the industry average of 18.92 over the last year. This valuation suggests meaningful upside for Carnival, supported by strengthening earnings momentum and improving balance sheet metrics. Image Source: Zacks Investment ResearchIn contrast, Norwegian Cruise’s lower multiple of 11.08 appears less like a bargain and more akin to a potential value trap, because it underscores heightened investor caution tied to elevated leverage, currency risk, and uneven European demand. These factors collectively signal a weaker risk-return profile.Buy Carnival or NCLH Now?As we advance, both Carnival and Norwegian Cruise are positioned to benefit from the continued cruise recovery and destination-led growth strategies. Carnival is expected to see steady yield improvement, driven by the launch of Celebration Key and the broader Paradise Collection, while Norwegian is building momentum through Great Stirrup Cay’s transformation and premium fleet expansion. However, despite both companies posting strong results and outlining credible growth paths, Carnival stands out as the better investment choice.Image Source: Zacks Investment ResearchThis is because Carnival’s net debt-to-EBITDA ratio of 3.86 is significantly lower than NCLH’s 5.21, indicating stronger financial flexibility and less refinancing risk in a high-rate environment.Furthermore, Carnival’s achievement of its 2026 transformation targets — EBITDA per ALBD growth, ROIC and carbon intensity reduction — 18 months ahead of schedule, reinforces its superior execution. With EBITDA margins at 20-year highs, Carnival is already running more efficiently, while Norwegian Cruise still contends with FX volatility and softer European demand.Hence, Carnival carries a Zacks Rank #2 (Buy), while Norwegian Cruise has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Carnival Corporation (CCL): Free Stock Analysis Report Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks