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Carnival (CCL) Stock Down on Extended Voyage Suspension

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Carnival Corporation & Plc’s (CCL - Free Report) Cunard recently extended halt in cruise operations for two of its ships, Queen Mary 2 and Queen Elizabeth. Following the announcement, shares of the company fell 3.7% during trading hours on Dec 9.

Notably, operations for Queen Mary 2 and Queen Elizabeth have been effectively paused through May 28 and Jun 4, 2021, respectively.

In this regard, Cunard president Simon Palethorpe stated, "Our extension to the pause in operations is the result of the ongoing restrictions on cruising in the UK and around the world, and recognizes the significant lead times to return to service once those restrictions are lifted.”

Nonetheless, Cunard is offering future cruise credits for its cancelled voyages. Notably, guests are entitled to 125% future cruise credits with an addition of 25% of the amount paid. Valid till December 2021, the credits can be used to book any voyages (depending on the availability) departing through early 2023.  Nevertheless, guests can also avail a refund, upon request.

Bookings Hurt By Pandemic

The cruise industry has been driven to a standstill by the coronavirus-induced crisis. The pandemic is hurting the company’s operations and global bookings.

The company stated that cumulative advanced bookings for the second half of 2021 capacity currently available for sale are at the higher end of the historical range. However, pricing on these bookings are down by mid-single digits compared with the second half of 2019 on a comparable basis. This reflects the effect of future cruise credits from previously-cancelled cruises being applied.

Other major cruise operators that have been negatively impacted are Royal Caribbean Cruises Ltd. (RCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) . So far this year, shares of Carnival has plummeted 55.3% compared with the industry’s decline of 25.7%.

Zacks Rank & Key Pick

Carnival currently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the Zacks Consumer Discretionary sector includes YETI Holdings, Inc. (YETI - Free Report) . The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

YETI Holdings has a three-five year earnings per share growth rate of 18.3%.

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