Buy Norwegian Cruise Line, Sell Carnival?
They say that a rising tide lifts all ships, but once again it seems as if the same can't be said about cruise line stocks. Citi analyst James Ainley is kicking off the new trading week by initiating coverage of Norwegian Cruise Line Holdings (NYSE: NCLH) with a bullish buy rating, just as he's downgrading shares of larger rival Carnival (NYSE: CCL) (NYSE: CUK).
There's a method to the madness. Ainley feels that Norwegian Cruise Line is better positioned to cash in on where the recovery stands for one of the hardest-hit niches of the travel industry. He feels that the recovery is favoring premium cruise lines given industry pricing trends heading into next summer. Carnival operates some high-end cruise lines, but its namesake brand is priced aggressively as the mass-market leader of the cruising industry. Carnival's flagship brand is often the haven for first-time cruisers and folks looking for the best deals in affordable cruising. Norwegian Cruise Line and Royal Caribbean (NYSE: RCL) tend to land slightly higher on the pricing spectrum.
Image source: Getty Images.
Source Fool.com
