Carnival shares fall on ballooning costs, dragging cruise stocks lower

Table Of Content

• Analyst's Opinion
• Should Investors Still Buy Carnival Cruise Stock Right Now, Even After Shares Doubled?
• Does Carnival Cruise Lines pay a dividend?
• Carnival Corporation & plc (CCL)
• Carnival CEO: Operations will proceed without a beat after Francis Scott Key bridge collapse
• Carnival beats loss expectations, but sees Baltimore bridge collapse resulting in a $10 million hit to 2024 income

You might be among those with an upcoming cruise booked on one of Carnival's brands. That might have you interested in investing in the cruise stock. Here's a step-by-step guide on how to invest in its shares and some things to consider before buying. Net revenue, prior to the COVID-19 pandemic, peaked out at over $6.5 billion annually.

Analyst's Opinion

However, it continued to make progress on the top line, with sequential revenue growth of 80% and bookings up 15% from the second quarter. It's easy to say this with the benefit of hindsight, but I don't necessarily think it's shocking to see Carnival putting up such strong numbers right now. Unless you were convinced that demand for cruise travel would permanently fall off a cliff, I bet you expected that this business would experience a reversion to the mean. That's even after shares soared 76% since the start of 2023 (as of April 18). You can buy shares of Carnival directly through any brokerage account. The cruise ship operator trades under the stock ticker CCL.

Should Investors Still Buy Carnival Cruise Stock Right Now, Even After Shares Doubled?

Carnival or Royal Caribbean: Bank of America Chooses the Superior Cruise Stock to Buy - TipRanks.com - TipRanks

Carnival or Royal Caribbean: Bank of America Chooses the Superior Cruise Stock to Buy - TipRanks.com.

Posted: Mon, 08 Apr 2024 15:51:18 GMT [source]

It's easy for investors to become short-sighted and focus too much on financial results from one year or one quarter. But it's best to think about the bigger picture, turning our attention to the long term. But this is a business that is recovering nicely from the worst days of the pandemic. At one point, Carnival was forced to halt its operations temporarily to prevent the spread of COVID-19. Revenue took a huge hit, dropping 91% between fiscal 2019 and fiscal 2021. In the five years leading up to its all-time high in January 2018, Carnival (CCL 1.63%) was a winning investment.

Does Carnival Cruise Lines pay a dividend?

This suggests a possible upside of 50.5% from the stock's current price. View analysts price targets for CCL or view top-rated stocks among Wall Street analysts. However, the company is righting the ship by reducing its debt and improving profitability. The company's world-class and steadily improving fleet puts it in a strong position to capitalize on robust and growing demand for cruising. Before the pandemic, global ocean cruise passengers had grown at a 5.5% compound annual rate from 2003 through 2019.

Carnival hit rough seas during the pandemic, forcing it to take on a boatload of debt and issue lots of stock to stay afloat. Profitability is the most critical factor determining whether a company can grow shareholder value over the long term. Typically, a company's stock price rises along with its earnings.

Is It Too Late to Buy Carnival Stock? - The Motley Fool

Is It Too Late to Buy Carnival Stock?.

Posted: Wed, 20 Mar 2024 07:00:00 GMT [source]

Justin Pope has no position in any of the stocks mentioned. Investors sitting on gains should claim profits in case this stock starts to sink. It took three painful years, but Carnival's business has rebounded. The company ended 2023 with $21.6 billion in revenue, roughly on par with 2019, the year before COVID-19 turned the business upside down. The company has done an admirable job of bouncing back to pre-pandemic top-line performance, but the pandemic's impact on the business has deteriorated Carnival's earning power. Jeremy Bowman has no position in any of the stocks mentioned.

It also faces competition from the broader travel and tourism industry, including resorts, casinos, and theme parks. For FY 2021, ended Nov. 30, 2021, Carnival reported a net loss of $9.5 billion on revenue of $1.9 billion. Carnival Corporation & plc is a leisure travel company operating a fleet of cruise ships, hotels, and resorts with international destinations. Brands under the Carnival Corporation umbrella include Carnival Cruise Line, Princess Cruises, Holland America, P&O Cruises, Seaborn, Costa Cruises, AIDA Cruises, and Cunard. The company’s goal is to provide extraordinary vacations at an exceptional value. As of 2022, the company laid claim to nearly half of the global cruising market share with several new ships in the works.

Upgrade to MarketBeat All Access to add more stocks to your watchlist. Carnival CEO Josh Weinstein joins 'Money Movers' to discuss how the bridge collapse will affect Carnival's operations, security concerns in the Red Sea, and any sign of slowing demand. In 2023, CCL's revenue was $21.59 billion, an increase of 77.46% compared to the previous year's $12.17 billion. As of March 21, 2022, Carnival Corp. had 989.7 million shares outstanding.

The likely outcome is that earnings stagnate for a few years while Carnival gets its financial legs under it. Little growth and a bloated balance sheet don't bode well for the stock. That is Carnival's market cap plus debt minus cash on hand.

Donald was previously CEO of the Executive Leadership Council from 2010 to 2012 and of the Juvenile Diabetes Research Foundation International from 2006 to 2008. He previously held executive positions at Merisant Co. and Monsanto Co. These are part of the firm's ongoing debt and interest expense reduction and capital structure simplification. Friday's losses knock about $2.5 billion off Carnival's market value. Shares of Norwegian and Royal Caribbean also fell Friday, down 18% and 13%, respectively. Carnival holds nearly $30 billion in debt and faces around $1.5 billion in annual interest expense, which will make a turnaround challenging.

Through the first six months of the year, the company reported a net loss of $563 million, or $3.02 per share. However, that was a significant improvement from the same period of the previous year when it posted a net loss of almost $1.3 billion, or $6.90 per share. 20 Wall Street equities research analysts have issued "buy," "hold," and "sell" ratings for Carnival Co. & in the last year. There are currently 1 sell rating, 2 hold ratings and 17 buy ratings for the stock. The consensus among Wall Street equities research analysts is that investors should "moderate buy" CCL shares. Carnival Corp. (CCL) is one of the largest leisure travel companies in the world.

Does this setup on the dip make Carnival a once-in-a-generation investment opportunity? Shares of Carnival stock cost around $15.50 a share in mid-2023. It would cost about $1,550 to buy 100 shares of Carnival stock at that price point. Buying at least 100 shares has a notable shareholder benefit. Shareholders with this many shares can receive an onboard credit of $50 to $250 per stateroom on sailings through July 31, 2024, for reservations made by Feb. 28, 2024.