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CCL: 3 cruise ship stocks sailing in rough waters right now – StockNews.com | Gmx Pharm

The pandemic caused port closures and a temporary cruise ban, resulting in massive revenue losses for cruise tourism. While demand has gradually recovered over the past year and a half, some large operators are still struggling to reach full capacity.

As the pandemic began, these companies were forced to anchor their cruise ships to docks and took on large amounts of debt to survive. The recent drop in discretionary spending on concerns over a possible recession with the Fed’s dovish stance will hurt cruise line operators’ bottom line.

With that in mind, cruise ship stocks Carnival Corporation & plc (CCL), Norwegian Cruise Line Holdings Ltd. (NCLH) and Royal Caribbean Cruises Ltd. (RCL) are expected to trend lower on weak financials, rising costs and fragile growth prospects. As such, these stocks are best avoided now.

Carnival Corporation (CCL)

CCL is the largest cruise operator in the world. Under the names of Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard, their ships make about 700 ports.

Last month, CCL’s Princess Cruises canceled 11 sailings aboard the Diamond Princess, citing staffing issues that have plagued the cruise industry this year. According to the company, the cruise line has faced “work-related challenges” as travelers have returned to cruises and its ships have resumed sailing with increased occupancy.

In July, CCL announced the completion of its previously announced public offering of 102,139,621 common shares of the Company at a public offering price of $9.95 per share. The Company expects to use the net proceeds from the Offering for general corporate purposes, including meeting debt maturities through 2023.

For the second quarter ended May 31, 2022, CCL’s revenue increased significantly year over year to $2.40 billion, but missed the consensus estimate. It is operating loss came to 1.47 billion dollars. The company reported a net loss of $1.83 billion while losing per share was $1.61.

CCL’s EPS estimate is expected to remain negative for the current quarter through August 2022 and fiscal 2022. The stock is down 53.8% over the past year and 47.5% year-to-date.

CCL’s POWR ratings agree with these bleak prospects. The stock has an overall rating of F, which equates to a Strong Sell in our proprietary rating system. The POWR ratings are calculated considering 118 different factors, with each factor being optimally weighted.

CCL was rated F for stability and vibes and D for value. Within the F rating Travel – Cruises Industry, it’s number 2 of 4 stocks.

To view additional POWR Ratings for Quality, Growth and Vigor for CCL, click here.

Royal Caribbean Cruises Ltd. (RCL)

RCL is one of the leading providers of cruise ships. The Company owns and operates three global cruise brands including Royal Caribbean International, Celebrity Cruises and Silversea Cruises. As of February 25, 2022, she was operating 61 ships.

Last month, RCL announced the completion of its private offering of $1,250,000,000 in aggregate principal amount of 11.625% of Senior Unsecured Debentures due 2027. Unless redeemed or repurchased earlier, the Notes mature on August 15, 2027.

The Company expects to use the net proceeds from the offering of the Notes to repay principal on debt maturing in 2022 and 2023. In addition, the Company may use the proceeds to repay loans under its revolving credit facility or other borrowings.

For the second quarter ended June 30, 2022, RCL’s total revenue increased significantly year-over-year to $2.18 billion. However, the operating loss was $218.64 million. The company reported a net loss of $521.52 million while losing per share was $2.05.

RCL’s EPS is expected to decline 164.3% per year over the next five years. The stock is down 40.6% over the past year and 36.4% year-to-date.

RCL’s poor prospects are also reflected in the POWR ratings. The stock has an overall rating of F, which equates to a Strong Sell in our proprietary rating system.

It also has an F grade for stability and mood and a D for value. RCL is #3 in the same industry. click here to view the additional POWR ratings for RCL (Momentum, Quality and Growth).

Norwegian Cruise Line Holdings Ltd. (NCLH)

NCLH is a global cruise company offering itineraries of its popular brands to various destinations such as Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, the Caribbean, Alaska and Hawaii. Popular brands include Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

NCLH revenue increased to $1.19 billion for the second quarter ended June 30, 2022 from the prior year. However, the operating loss was $396.80 million. The company reported a net loss of $509.32 million. Loss per share was $1.22.

Streets expects NCLH’s EPS to decline 165.1% annually over the next five years and remain negative in the current fiscal year. The stock is down 39.2% over the past year and 27.3% year-to-date.

NCLH’s weak fundamentals are reflected in its POWR ratings. The stock has an overall rating of F, which equates to a Strong Sell in our proprietary rating system. The stock has an F for stability and sentiment and a D grade for quality. In the same industry, it ranks last.

In addition to the POWR rating grades just highlighted, you can see the NCLH rating for Momentum, Value, and Growth here.


CCL shares traded at $10.73 per share on Friday afternoon, down $0.19 (-1.74%). Year-to-date, CCL is down -46.67% versus a -18.72% gain in the benchmark S&P 500 over the same period.

About the author: Pragya Pandey

Pragya is an equity analyst and financial journalist with a passion for investing. She majored in finance in college and is currently completing the CFA program and is a Level II candidate. More…

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