Aug. 18 at 8:30 PM
$NCLH I have read Mizuho’s downgrade arguments today. It says NCLH’s net leverage will be above 7.0x and will face a bankruptcy insolvency risk unless issuing secondary equity shares to dilute the value. It also estimates 2027 EPS to be
$1.22 which is overly pessimistic.
I don’t think this is a likely scenario. The company just settled an exchangeable senior note with cash, which means further equity issuance is very unlikely. 7.0x leverage ratio also assumes NCLH will largely miss its own EBITDA guideline by a wide 15%. Newly developed ships have much higher profit margins than old ships, so the new ships will only improve its EBITDA margin, which Mizuho did not seem to consider.
