Analysts have the power to influence stock prices. On Wednesday, Citigroup upgraded cruise line stocks from a neutral rating to a buy.
Citi said that Norwegian Cruise Line (NCLH) is shifting its strategy, which should lead to earnings upside. Markets would expand their multiple in response. That is, they would have a willingness to pay a higher price-to-earnings multiple. NCLH gained over 10% yesterday.
The firm is also bullish on Royal Caribbean Cruises (RCL). Carnival (CCL) gained 7%. The stock needs to hold the $20 level for a few weeks first. Otherwise, the rally would prove short-lived.
Cold Stocks
Stocks that fell on the last day include Constellation Energy (CEG). Profit-takers are worried that the jump from around $200 to over nearly $280. BTIG analysts said that the utility sector risks a downward correction. Investors who sell CEG stock may also reduce their weighting in the ETF, XLU.
NRG Energy (NRG) pulled back by 5.34% on Wednesday. Still, the stock has an excellent valuation at a forward non-GAAP P/E of 12 times, complemented by strong growth and profitability.
In the aerospace sector, watch Boeing (BA). The firm is considering raising cash to prevent rating agencies from downgrading its debt. Investors should hold military stocks instead. This includes Lockheed Martin (LMT), RTX (RTX), and Northrop Grumman (NOC).
