TUI’s Cruise Ships Escape the Gulf, but the Profit Damage Is Already Done

TUI's two cruise liners escape Persian Gulf detention, but €40M Q2 hit forces full-year EBIT guidance cut to €1.1-1.4B; stock down 28% YTD.

Two of TUI’s cruise liners are finally steaming toward the Mediterranean after a seven-week standoff in the Persian Gulf, but the financial fallout from their detention has already forced the travel giant to tear up its full-year profit forecast.

Mein Schiff 4 and Mein Schiff 5 slipped through the Strait of Hormuz on April 18 during a brief ceasefire, racing at high speed in coordination with local authorities. Rather than taking the Suez Canal shortcut, both vessels are now making the long haul around the southern tip of Africa, with a scheduled stop in Cape Town at the end of the month to refuel, restock provisions and rotate crew members. TUI hopes to have Mein Schiff 5 operational out of Heraklion, Crete, from May 22, with Mein Schiff 4 earmarked for Adriatic cruises departing Trieste from May 24 — though official confirmation of those itineraries has yet to land.

The Iran conflict has already carved a deep hole in the company’s second-quarter numbers. TUI repatriated roughly 10,000 guests in March, including about 5,000 passengers stranded on the two blocked ships, and has scrapped all sailings for both vessels through mid-May. The total hit to the quarter is estimated at around €40 million. Even so, management expects to report an adjusted EBIT of between €5 million and €25 million for the period — a dramatic improvement from the €207 million loss recorded in the same quarter last year, but a far cry from what might have been without the disruption.

That €40 million burden is a key reason TUI slashed its full-year EBIT guidance on April 22 to a range of €1.1 billion to €1.4 billion, abandoning its earlier target of 7 to 10 percent growth over the prior year’s €1.413 billion. The company also suspended its revenue forecast entirely, citing geopolitical uncertainty. The market’s response was swift: the stock has shed roughly 28 percent since January 1 and 10 percent in the past week alone, closing at €6.46 — just 5 percent above the 52-week low of €6.15 and 31 percent below the year’s peak of €9.41.

Analysts have been scrambling to adjust their models. Deutsche Bank cut its price target from €12.00 to €10.50 while keeping a “Buy” rating. JPMorgan trimmed to €12.50 but stayed “Overweight.” Barclays went further, slashing its target to €9.00 on April 27, though it too held its positive stance. Bernstein Research, meanwhile, maintained a “Market-Perform” rating with a €9.20 target, with analyst Richard J. Clarke pointing to weak demand rather than fuel costs as the primary concern — noting that TUI has already hedged 83 percent of its jet fuel for the summer season.

That hedging provides some insulation from the surge in Brent crude, which is trading around $106 to $108 per barrel on supply disruptions linked to the Iran conflict. But the bigger question for TUI is whether the summer season can salvage the year. The next major checkpoint comes on May 13, when the company releases its second-quarter and first-half results. Analysts expect adjusted EBIT for the quarter to land somewhere between €5 million and €25 million — a wide range that underscores just how little visibility exists right now. The booking data for the peak season, and whether rerouted Mediterranean itineraries can offset the lost Middle East business, will determine whether the revised annual targets hold up.

Technically, the stock is flashing an oversold signal: the relative strength index sits at 22, a level that has historically preceded short-term bounces. But with a proposed dividend of €0.193 per share for fiscal 2026 still pending shareholder approval and contingent on earnings performance, the market is likely to wait for hard numbers before betting on a recovery.