The share price of Carnival (NYSE: CCL), the largest cruise operator in the United States, rose about 9% in trading on Wednesday and still rose about 3% in the last week (five days of negotiation). In contrast, the S&P 500 Index fell slightly last week. The recent rebound is due to the company’s scheme of plans to bring its entire fleet back to service by the end of 2021, increasing its total operating capacity to nearly 75% by the end of the year. Given that the company only resumed travel from US ports earlier this month, this indicates that business growth is earlier than expected. So are Carnival stocks going higher or about to adjust? According to our machine learning engine that analyzes Carnival’s historical stock price movements, after the stock has risen about 3% in the past five days of negotiations, there is a 51% chance of a fall next month. Check out our analysis of the upside potential of Carnival stocks for more details.
Although the reopening plan bodes well for Carnival’s business, there are still some concerns. First, the highly infectious delta variant of the coronavirus has spread in the United States and other countries, which may pose a challenge to cruise ship recovery, as the vaccine clearly provides less protection for this variant. Given that cruise ships became a major hotspot during the first wave of the pandemic in March last year, this may cause concerns for some potential cruise ship customers. Additionally, Carnival’s high leverage ratio remains concerning. Its net cash in debt last quarter was roughly $ 20 billion, up from $ 11 billion before the pandemic. Higher interest costs and debt repayment can limit returns to shareholders in the medium and long term. That said, considering that the population is still nearly 55% below its pre-epidemic level, these risks may have been discounted.
[6/14/2021] With the cruise industry reopening, is Carnival worth buying stock? Fueled by positive news in many respects, the share price of
Carnival Corp., the largest cruise ship operator in the United States, rose almost 20% last month. Carnival confirmed that it will start transiting through U.S. ports on the weekend of July 4, and its Carnival Vista ship will set sail from Galveston, Texas on July 3, and another ship may depart from Galveston, Texas in late July. Set sail for Florida. In addition, Carnival will resume its Alaska sailing in July, after Congress passed the Alaska Tourism Recovery Act, temporarily allowing cruise ships to sail to Alaska, bypassing legal requirements to call at Canadian ports. The cruise company had previously cancelled trips to Alaska, a popular summer cruise destination. The US Centers for Disease Control and Prevention also updated its cruise ship guidelines in late May, stating that cruise ships on which at least 95% of passengers and crew members are vaccinated will not need to wear masks or maintain physical distance in any area. This move may increase people’s confidence in cruise safety and help drive demand to a certain extent.
Now, although the company’s one-year cruise halt is finally coming to an end, we still believe that 2021 will be a year of transition, and Carnival will take a cautious approach to its cruise during the reopening period. Consensus estimates indicate that this year’s revenue is less than $ 4 billion, which is 30% lower than 2020 revenue. However, the situation should improve significantly in 2022. Driven by higher demand and higher fees, sales can skyrocket to roughly $ 18 billion, slightly lower than pre-pandemic levels. While Carnival’s high level of leverage remains concerning – last quarter net debt and cash were roughly $ 20 billion, up from $ 11 billion before the pandemic – given that the shares still exist, the risk of being digested is down nearly 45% from the 2019 high.
Our analysis of Carnival share growth opportunities describes how Carnival shares perform, how they compare to their peers, and how likely they are to rise next month.
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[05/16/2021] Carnival
stock Update Carnival (NYSE: CCL) stock price has risen by about 10% in the past two working days because the Centers for Disease Control and Prevention pointed out that fully vaccinated people can stop wearing masks outdoors and in most indoor environments , While eliminating the need for social distancing. Although the new guidelines do not specify whether fully vaccinated people participating in recreational cruises need to wear masks and maintain social distancing, the direction taken by the CDC indicates that these restrictions are likely to be relaxed. The CDC statement should also assure the public that the situation is returning to normal after Covid, which should bode well for the cruise industry, which was the first to be affected by the pandemic. In addition, last week, Pfizer’s Covid19 vaccine received final approval for use in children aged 12-15. This may also be positive for the cruise business, as demand from young families may recover.
Now, although the recent events bode well for the industry, given that cruise ships have been suspended for about 14 months, the industry may see some pent-up demand, but we expect the recovery to be gradual. Cruise ships are likely to miss most of the lucrative summer cruise season because they will resume operations from mid-July and operations may gradually increase. For example, Carnival is taking a cautious approach, with only three ships likely to set sail from the United States in July. Although the industry may be stronger in 2022, we may not expect the level of activity before the pandemic. For example, the general estimate of Carnival points to approximately US$18 billion in revenue in 2022, while the company’s reported revenue in 2019 is approximately US$21 billion. Chapter
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