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Carnival (CCL) Reschedules Select Costa Cruises, Stock Down

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Carnival Corporation & Plc’s (CCL - Free Report) Italy-based Costa Cruises recently announced revised dates for the restart of operations for Costa Smeralda and Costa Luminosa. Following the announcement, shares of the company fell 5.1% during the trading hours on Mar 22.

Notably, the company had moved the dates forward, owing to the pandemic-led restrictions in Italy and other European countries. Also, the decision was taken keeping in mind the safety of its crew members and guests both onboard and ashore.

However, with an increased focus on Costa Safety Protocol, the company now plans to resume operations for Costa Smeralda and Costa Luminosa on May 1 and May 16, respectively. The company stated that the resumption will be supported by operational measures covering all aspects of on-board and ashore experiences. These include limited capacity, swab tests, temperature checks when disembarking and re-embarking the ship, protected shore excursions, physical distancing measures, enhanced sanitation and medical services, and use of protective face masks.

Moreover, the company emphasized that talks with national and local authorities of several countries (included in the itineraries) are underway to define further details on the resumption of operations.

Meanwhile, Carnival has confirmed the cancellation of all other cruises (except for Costa Smeralda and Costa Luminosa) scheduled until May-end. Also, impacted customers and travel agents are currently being notified of the same.

Price Performance

Coming to the price performance, shares of Carnival have gained 26.9% so far this year compared with the industry’s 21.6% growth. Notably, the company is witnessing ticket price improvements for both of its North American and EAA brands, with robust ticket price improvements in its Caribbean deployment. Also, it is optimistic about its innovation featuring Ocean Medallion, PlayOcean and OceanView. These new offerings are anticipated to accelerate and expand engagement, thereby enhancing the guest experience. This along with the commencement of the vaccine rollout is likely to boost investors’ sentiments.

However, coronavirus-related woes persist. The company’s cruise operations have been halted due to the pandemic. The company is unable to provide earnings guidance for fiscal 2021 as it is unsure as to when the entire fleet will return to normal operations. Notably, the pause in operations will continue to hurt the company’s liquidity and results.

Carnival — which shares space with Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Royal Caribbean Cruises Ltd. (RCL - Free Report) in the Zacks Leisure and Recreation Services industry — has a Zacks Rank #4 (Sell), at present.

A Key Pick

A better-ranked stock in the leisure space is Camping World Holdings, Inc. (CWH - Free Report) , which carries a Zacks Rank # 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Camping World Holdings has a three-five-year earnings per share growth rate of 34.7%.

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