Carnival shares fall on ballooning costs, dragging cruise stocks lower

Table Of Content

• Port Canaveral (Orlando), FL
• Stocks That Will Be Hit Hardest by the 2024 Baltimore Bridge Disaster
• Industry, Sector and Symbol
• Carnival shares shed 23% on ballooning costs, dragging cruise stocks lower
• Cunard Officially Welcomes New Ship Queen Anne with Ceremony at Fincantieri Shipyard
• Wall Street Favorites: 3 Cruise Stocks with Strong Buy Ratings for April 2024

Rather, I believe that investors should focus on the business. Two of the best things happening right now are the company's full ships and the speed of its debt repayment. If both of these things can continue throughout the next year and beyond, I'd feel good if I were a shareholder planning to hold for the long term. It is wonderful that Carnival is attracting customers who have never been on a cruise before.

Port Canaveral (Orlando), FL

With a strong year like that and a couple of concerns in January, it's not surprising to see it have a small 11% pullback.

Stocks That Will Be Hit Hardest by the 2024 Baltimore Bridge Disaster

While profits plateaued in 2019, they steadily grew in the years before then and had more than doubled their total from 2013. With the company working hard to improve earnings while growing its fleet, it could eventually set a new profitability record. Carnival has been bearing the brunt of high expenses for quite some time. During the fiscal first quarter, operating costs and expenses increased 12% year over year to $3.7 billion. Additionally, higher onboard revenues led to a $43 million increase in onboard and other cost of sales, while repair and maintenance expenses, including dry-dock costs, rose by $30 million.

Industry, Sector and Symbol

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. The industry had gotten back on a growth trajectory in 2023, with Carnival reporting all-time highs in bookings and customer deposits in the year's second quarter. The leading cruise ship operator is benefiting from the growing demand for cruises.

The world's largest cruise company's commitment to sustainability and the enchanting beauty of Mahogany Bay in Roatan, Honduras, recognized with top environmental honor MIAMI , April 4, 2024 /PRNewswi... The market was potentially downbeat about a couple of factors. First, Carnival owns the Princess Cruises brand and its new largest ship, the Sun Princess, was scheduled to set sail in February. However, the ship won't be ready in time, forcing Carnival to reschedule and offer refunds and travel credits to those who had already bought tickets.

Carnival shares shed 23% on ballooning costs, dragging cruise stocks lower

World's largest cruise company finalizes agreement with Meyer Werft for new world-class cruise ship scheduled for delivery in 2028 MIAMI , March 26, 2024 /PRNewswire/ --  Carnival Corporation & plc (N... CCL slipped 0.5% in premarket trading Wednesday, after the cruise operator reported an narrower-than-expected fiscal first-quarter loss but also said it expected the collapse ... Proceeds from the offering of senior unsecured notes and cash on hand to be used to redeem €500 million 7.625% senior unsecured notes due 2026; cash on hand to repay $800 million of the term loan faci... Carnival said bookings improved 15 percentage points from the prior quarter to 84%.

Cunard Officially Welcomes New Ship Queen Anne with Ceremony at Fincantieri Shipyard

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]

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. Additionally, geopolitical turmoil in the Red Sea is forcing Carnival and other cruise lines to reroute cruises that were scheduled to pass through there.

There are currently 1 sell rating, 2 hold ratings and 17 buy ratings for the stock. The consensus among Wall Street analysts is that investors should "moderate buy" CCL shares. I don't believe investors should expect Carnival stock to more than double in 2024 like it did in 2023.

To put a number on that, a one-day ticket to Disney World runs around $150 per person. So a family of four would cost $600 just to walk into the park. The stock closed at a new 52-week low of $7.03, below its pandemic plunge lows of April 2020, when shares traded around $7.80 intraday. However, the company is also trying to repay the debt it took on during the pandemic. It will take the company several years to get debt back down to a more comfortable level.

An entire cruise could cost $600 (or less) per person, and includes the cruise, food, and a room. Cruise ships are also including more and more amenities, like amusement-style rides, water parks, and sports facilities, to better compete for traveler's dollars. Carnival has been benefiting from a resurgence in demand for cruises following the effective industry shutdown during the early days of the coronavirus pandemic. But that demand isn't just coming from existing cruisers -- there's a whole new contingent of people who are experiencing cruising for the very first time.

Explore how you can make money from others' adventures, including the frontier of space travel. Carnival could complete a reverse stock split to help reduce its outstanding share count. The company is unlikely to resume paying dividends for the foreseeable future. Its primary focus is on shoring up its balance sheet following the pandemic. Either way, expect the volatility in Carnival stock to continue. Upgrade to MarketBeat All Access to add more stocks to your watchlist.

Wiping them out gets it closer to a more sustainable debt burden. As it ended 2023, Carnival said that it was in its best booked position ever -- demand for cruises has been exceptionally high and it introduced 3.5 million people to cruises last year. And when it gave its update about the Red Sea, the company clarified things even further by saying that it's almost fully booked for its cruises in the first half of this year. Cruise companies across the board are struggling with massive debts taken on during Covid lockdowns, made more expensive by rising interest rates. Carnival on Friday morning reported $1 billion in principal payments so far for 2022 and a total of $9 billion due by 2025.

However, the S&P 500 ETF had a tiny allocation at 0.04% of the fund's total holdings, so there are better ways to gain exposure to Carnival. The company is scheduled to release its next quarterly earnings announcement on Monday, June 24th 2024. MarketBeat just released its list of 10 cheap stocks that have been overlooked by the market and may be seriously undervalued. In 2023, CCL's revenue was $21.59 billion, an increase of 77.46% compared to the previous year's $12.17 billion.

That's hindering its ability to grow shareholder value through dividends, share repurchases, and new investments. Although they have lots of upside potential, they also have lots of risk. Carnival stock plunged at the end of September after the company issued another disappointing earnings report and the stock sank to 30-year lows. 23 employees have rated Carnival Co. & Chief Executive Officer Arnold W. Donald on Glassdoor.com. Arnold W. Donald has an approval rating of 93% among the company's employees. This puts Arnold W. Donald in the top 30% of approval ratings compared to other CEOs of publicly-traded companies.

However, the company suspended its dividend in March 2020 to conserve cash because of the pandemic's impact on its operations. Before that, Carnival and its predecessors had paid quarterly dividends since 2001. Wednesday's Fed rate hike also showed that a pivot is probably further away than Carnival investors had hoped. Travel demand should continue to come back, barring a recession, but a return to profitability will take longer.

New Rank-Based ScoringMarketRank™ is calculated by averaging available category scores (with extra weight given to analysis and valuation), then ranking the company's weighted average against that of other companies. The cruise operator said it expects the disruption to hit annual adjusted earnings by as much as $10 million. Carnival Corp. has listed for sale its sprawling headquarters on the outskirts of Miami, seeking to cash in on real estate the cruise giant has owned for roughly three decades.