JPMorgan has downgraded its stock rating for Royal Caribbean Cruises and Norwegian Cruise Line Holdings in a note to investors. 

In both cases, the companies went to a neutral rating from overweight, with the company citing limited upside in net yields and pricing.

JPMorgan held its neutral rating on Carnival Corporation.

Price targets were cut for all three stocks, with Royal Caribbean being cut from $96 to $73, Norwegian from $62 to $44 and Carnival from $58 to $46.

The cruise stocks were considerably down at market close on Thursday, with Norwegian dropping 5.95 percent to $35.71 and Royal dipping 2.65 percent to $68.05.

The note said:

“While we see positive attributes such as sizable YTD underperformance, undemanding valuations relative to history, and apathetic investor sentiment in the sector, we do not see a meaningful fundamental turn in net yields/pricing, which, in our view, would be the biggest potential reason for investor sentiment to turn positive and/or the multiples to move higher. And while our EPS estimates are generally below sell-side consensus, we don’t believe they are meaningfully lower/different than where our sense of where buy-side expectations lie.

Our projected net yields account for mix resulting from capacity changes, our proprietary cruise pricing survey work, and in-house JPM forecasted GDP growth for both developed markets and emerging markets, and our opex assumptions account for volatile FX and rising fuel. In short, we see Norwegian as having relatively attractive EPS growth, though largely capacity driven in 2017, and with its exposure to Europe and the Caribbean, which we expect to exhibit soft pricing in the near term, we see it having the most EPS risk, and therefore requires an undemanding 2017E P/E valuation. Carnival trades at a premium to Norwegian and Royal Caribbean, we believe reflective of its less pervasive Europe exposure, solid balance sheet and div. yield. We view Royal Caribbean’s risk-reward as in between Carnival and Norwegian.”