JPMorgan Downgrades NCLH Stock Following Leadership Shake-Up, But Retail Traders Express Confidence In New CEO

• JPMorgan downgraded the stock to ‘Neutral’ from ‘Overweight’ and cut its price target to $20 from $28.
• The firm said it is taking a more cautious stance while the company navigates the executive change.
• Chidsey most recently served as CEO of Subway for five years, during which he helped refresh the brand and streamline its operations. 

JPMorgan downgraded Norwegian Cruise Line Holdings (NCLH) to ‘Neutral’ from ‘Overweight’ and cut its price target to $20 from $28 following an unexpected leadership shake-up at the cruise operator.

The downgrade came after Norwegian disclosed that CEO and board member Harry Sommer stepped down on February 12 as part of what the company described as a strategic management transition. 

Leadership Transition Sparks Caution

JPMorgan said it is taking a more cautious stance as the company navigates the executive change, according to TheFly. 

Sommer’s departure marks a huge shift for the cruise line as it works to sustain operational momentum in a competitive travel market. The company named John Chidsey as incoming chief executive, a move JPMorgan views positively over the longer term.

The firm expressed confidence that Chidsey can sharpen execution, improve profitability, and continue efforts to lower debt levels. However, analysts opted to “step to the sidelines” during the transition. 

Norwegian Cruise’s stock traded over 4% lower on Friday morning. 

What Did Stocktwits Users Say? 

However, on Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘neutral’ territory the previous day. Message volume shifted to ‘high’ from ‘normal’ levels in 24 hours. 

The stock saw a 62% increase in retail messages over 24 hours as of Friday morning. 

A bullish Stocktwits user expressed confidence about the new CEO, citing Chidsey’s impressive track record. 

Track Record Of Guiding Major Turnarounds

Chidsey most recently worked as CEO of Subway for five years. During that time, he worked on a long-term plan to refresh the brand and update the company's operations. Before Subway, he was CEO of Burger King Holdings after serving as its President and CFO, where he helped tighten operations and lead the company through major changes.

Norwegian Cruise is expected to report its fourth-quarter (Q4) earnings on March 2. Analysts see a Q4 revenue of $9.92 billion and earnings per share (EPS) of $2.1, according to Fiscal AI data. 

NCLH stock has declined by 15% in the last 12 months. 

Also See: Why Did INTS Stock Plummet 25% Today?

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