Royal Caribbean Cruises Ltd. (NYSE: RCL) and Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) are both navigating headwinds, but BNP Paribas analyst Xian Siew believes the challenges facing the two cruise operators are far from equal. Following meetings with investor relations teams at both companies, BNP reiterated its Outperform rating on Royal Caribbean while maintaining a Neutral rating on Norwegian, arguing that Royal's biggest overhang-a likely delay to its Perfect Day Mexico project-is manageable, while Norwegian continues to grapple with operational and pricing issues that could take much longer to resolve.
Royal Caribbean's Mexico Project May Be Delayed
The biggest uncertainty surrounding Royal Caribbean remains Perfect Day Mexico after Mexican authorities declined to approve the project in its current form.
BNP expects the destination could be delayed by nine to 12 months, pushing the opening into late 2028. Even so, the brokerage believes the setback is unlikely to derail Royal's longer-term growth story. Siew expects Royal to hold its midpoint guidance of 2% net yield growth for 2026, helped by the possibility of stronger-than-expected second-quarter results that could ease investor concerns over the back half of the year. Looking further ahead, the outlook improves even more in 2027 as capacity growth slows to about 4% from 6.7% in 2026, providing additional support for pricing.
Even if Perfect Day Mexico slips, Royal will still have Royal Beach Club Cozumel opening in early 2028 and, if necessary, could eventually explore alternative destinations such as Belize or Honduras.
Norwegian's Turnaround Still Has Hurdles To Clear
Siew sees a more complicated road ahead for Norwegian. While management has acknowledged that improving yields will take time, the brokerage believes new issues continue to emerge, making a meaningful recovery before 2027 increasingly difficult.
Among the concerns Siew highlighted are pricing decisions that may have prioritized filling ships over maximizing yields, continued leadership changes, including the search for a chief marketing officer, "open jaw" European itineraries, and questions surrounding booking management.
The firm believes those execution issues could weigh on performance into next year, even as Norwegian's Great Tides water park at Great Stirrup Cay is now expected to open on schedule in September.
Siew noted the attraction could boost both admission revenue and cruise ticket pricing over time, but argued it is unlikely to offset the broader operational challenges facing the company.
For investors choosing between the two cruise stocks, BNP's takeaway was clear: Royal Caribbean appears to be managing through a temporary project delay, while Norwegian is still working toward a broader business turnaround that may not fully materialize until the second half of 2027.