Why the Big 3 Cruise Stocks Are Looking More and More Like Sinking Ships

Core Insights - The cruise sector is entering 2026 with record bookings, but the stocks of the "Big 3" — Carnival, Norwegian, and Royal Caribbean — are facing challenges as the market shifts focus from revenue to margins and regulatory issues [2] Group 1: Company Performance - Royal Caribbean (RCL) has significantly outperformed its peers with a strategy that accommodates various budget levels, targeting 20% earnings per share (EPS) growth [3] - Carnival (CCL) achieved record revenue in 2025, but is facing rising unit costs (over 3%) and increased global tax exposure in 2026, leading to a perception of it being a "catch-a-falling-knife" stock [4] - Norwegian Cruise Line (NCLH) has lagged behind, only outperforming a small portion of stocks in the S&P 500 Index over the past year [5] Group 2: Market Position and Valuation - In terms of market capitalization, RCL is the largest, more than double its peers, despite CCL having higher annual sales [6] - NCLH is the smallest and cheapest among the three, with a trailing price-to-earnings (P/E) ratio of 11x, selling at 1x sales and half its growth [7] Group 3: Technical Analysis and Investor Sentiment - All three cruise stocks exhibit high volatility, being twice as rocky as the S&P 500 or more [6] - The technical outlook for these stocks is not favorable, leading to a sentiment that they are treated similarly by Wall Street [8] - Despite near-term challenges, there is a belief that NCLH may have long-term growth potential based on chart analysis [9]