Norwegian Cruise Line Holdings Ltd Stock Falls After Ship Malfunction

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A passenger ship owned by Norwegian Cruise Line Holdings sailed slightly out of control while departing the port of Bermuda on Tuesday, May 19. Reports about the situation negatively impacted the stock price of the global cruise line operator.

The shares of Norwegian Cruise Line dropped more than 4% to $54.79 per share at the time of this writing around 1246 in the afternoon in New York.

Norwegian Dawn’s steering system malfunction

According to Norwegian Cruise Line, its passenger ship called Norwegian Dawn suffered a temporary malfunction of its steering system. The malfunction caused the ship to sail slightly off course and resulted in its contact with the seabed.

“The ship’s officers, engineers, and an independent dive team have confirmed the structural integrity of the ship. With high-tide this evening, the ship was floated and moved to a nearby anchorage position where it will remain overnight,” said Norwegian Cruise Line Holdings in a statement.

The Norwegian Dawn is currently inspected by DNVGL, its officers, engineers, and technical team before sailing back to Boston. Norwegian Cruise Line emphasized that all of its crew and guests were safe. Nobody was injured.

According to the company, Norwegian Dawn is fully operational with the full complement of onboard services available to guests. The ship is sailing on a seven-night Boston to Bermuda cruise with 2,443 passengers and 1,059 crews.

Norwegian Cruise Line secondary public offering

Separately, Norwegian Cruise Line announced a secondary public offering of 20 million of its ordinary shares by its selling shareholders, Apollo Global Management, Star NGLC Holdings, and TPG Capital

Norwegian Cruise Line will not sell any ordinary shares in the offering and will not receive any proceeds. The total number of its outstanding ordinary shares is the same after the secondary offering of its selling shareholders. Goldman Sachs serves as the sole underwriter for the offering.

Norwegian Cruise Line stock rating

Norwegian Cruise Line received an average Buy rating from the fourteen brokerage firms covering its shares. Six investment analysts have a Hold rating while eight issued a Buy recommendation for the stock.

Analysts at Barclays recently increased their price target for Norwegian Cruise Line from $52 to $58 per share. They have an Overweight rating for the stock.

Yesterday, analysts at SunTrust issued a Neutral rating for Norwegian Cruise Line with a $55 price target.

Over the past 52 weeks, the stock price of Norwegian Cruise Line traded between $30.44 and $57.55 per share. The company gained more than 16% of stock value year-to-date.

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