Investment firm Exane BNP Paribas expects cruise net yields to grow steadily in 2025 and 2026 due to strong demand and new revenue drivers like private islands. These exclusive destinations offer cruise lines the ability to upsell guests on experiences at an estimated $125 per person per day. With this advantage, cruise companies are finding new ways to increase profits and create more value for travelers. As a result, the firm’s analysts are bullish on the cruise industry's long-term outlook.

They also pointed to favorable demographics and the ability to gain market share in the $2 trillion global vacation market. Exane BNP Paribas believes that cruise lines will benefit from limited supply growth and rising demand, which should strengthen pricing power. Digital innovations are also helping cruise companies increase onboard spending and improve customer experience, which should lead to more earnings growth.

Therefore, it is no surprise that the firm began coverage on major cruise stocks with Buy ratings on Carnival (CCL), Royal Caribbean (RCL), and Viking Holdings (VIK). Indeed, Carnival's upcoming Celebration Key island is expected to be a key yield driver for the company. At the same time, Royal Caribbean was praised for its successful private island strategy and strong growth potential, while Viking stands out for its premium brand, high bookings, and excellent return on capital. Interestingly, though, Norwegian Cruise Line (NCLH) was rated a Hold since it lacks some of the growth drivers that its peers enjoy.

Which Cruise Stock Is the Best Buy?

Overall, out of the four stocks mentioned above, analysts think that NCLH stock has the most room to run. In fact, NCLH's average price target of $30 per share implies more than 50% upside potential. On the other hand, analysts expect the least from VIK stock, as its average price target of $51.11 equates to a gain of 24.4%.

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