Down 80%, Is Carnival Stock a Once-in-a-Generation Investment Opportunity? The Motley Fool

Carnival hit rough seas during the pandemic, forcing it to take on a boatload of debt and issue lots of stock to stay afloat. Carnival Cruise Line is the company’s largest brand serving guests on all coasts of North America. The brand's 22 ships make 1500 voyages per year with trips ranging from 2 days to 3 weeks and ports of call from the Caribbean to Alaska. The company's largest ship is named Panorama and can accommodate more than 4,000 passengers. The company’s growth hit a new stride in 1987 following the IPO which floated 20% of the company on the open market. The proceeds from the IPO allowed the company to embark on a voyage of acquisition and now Carnival is the world’s largest travel and leisure business.

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

We’re currently working on an updated video for 2024 that includes StockPerks details. Many have written to us about changes to the process on requesting the Carnival Shareholder Benefit. Over the past year, Carnival Corporation tested an updated process through an app called StockPerks. A quick search will bring up countless Facebook threads and cruise message board posts with questions about the app. 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 Shareholder Benefit Recap Video

That's even after shares soared 76% since the start of 2023 (as of April 18). This isn't the first time that Carnival lands well ahead of what the market was expecting. It's been a perpetual beater since getting its fleet back into operation after the COVID-19-related shutdown. More importantly, the last three quarters have been hammered home with double-digit positive earnings surprises. Its booked position for the balance of this young fiscal year is its best on record in any year at this point.

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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. Carnival has undertaken several actions to improve profitability, which it expects to start achieving in the second half of 2023. In addition, it anticipates growing its adjusted free cash flow. That should enable the company to continue paying down debt. Carnival anticipates delivering $8 billion in net debt reduction between 2024 and 2026, helping to reduce its interest expenses and take the pressure off its balance sheet. You might be among those with an upcoming cruise booked on one of Carnival's brands.

Carnival Corp & plc Announces Maritime Executive Changes

I don't believe this is a once-in-a-generation investment opportunity. 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.

Carnival Shareholder Benefit (valid through December

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. However, the company posted a $1.83 billion second-quarter loss and said the effects of the pandemic and higher fuel prices will lead to another loss in the third quarter. MarketBeat's analysts have just released their top five short plays for May 2024.

Investment research

Carnival (CCL 4.31%) is the largest cruise line in the world. The company operates nine cruise line brands with over 90 ships visiting more than 700 ports annually. 20 Wall Street 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 analysts is that investors should "moderate buy" CCL shares. Carnival suspended cruise operations in March 2020 after the COVID-19 pandemic struck.

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Arnold W. Donald has been Carnival's chief executive officer since 2013. 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. Carnival Corp. and Carnival plc operate a dual-listed company. It should only be considered an indication and not a recommendation. Cruise companies across the board are struggling with massive debts taken on during Covid lockdowns, made more expensive by rising interest rates.

Carnival Analyst Data

It has been steadily repaying debt and plans to continue doing so. It also continues to invest money to refine its fleet, which will see eight new ships delivered across its brands through 2025. Like many travel stocks, Carnival had to navigate some rough seas during the COVID-19 pandemic. The cruise line company ceased operations for several months, which had a devastating financial impact.

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]

Carnival Cruise Line was launched in 1972 with one second-hand ship and a tank of fuel. The first port of call was San Juan, Puerto Rico, but soon more were added. The original growth strategy included a festive atmosphere, features and amenities unlike any other cruise line at the time. Slow to start, the growth strategy shifted into overdrive in 1980 when Carnival shocked the world by building its own ship. The Tropicale became an iconic name in the cruising industry and sparked a wave of shipbuilding that is still underway.

The company is scheduled to release its next quarterly earnings announcement on Monday, June 24th 2024. No, Carnival has not paid a dividend since suspending dividend payments amid the COVID-19 pandemic in 2020. Unvaccinated guests also must show proof of travel insurance coverage in some cases, and may only go ashore in ports of call when booked on a Carnival-sponsored tour. Check out our video recap on the benefits of being a Carnival Shareholder.

Carnival relaunched cruises from the U.S. on July 3, 2021, when the Carnival Vista departed from Galveston, Texas. These include pre-cruise questionnaires and testing for vaccinated guests, and proof of vaccination required at terminals in advance of boarding. One of the most viewed pages on our site is about the benefits you receive for being a shareholder with your favorite cruise line.

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. Micky Arison chairs both Carnival boards, while Arnold W. Donald is the chief executive officer (CEO). For investing purposes, Carnival is grouped with the consumer cyclical (consumer discretionary) sector, operating within the hotels, restaurants and leisure industry. The company's direct competitors include Royal Caribbean Group (RCL), Norwegian Cruise Line Holdings Ltd. (NCLH), and Lindblad Expeditions Holdings Inc. (LIND).

In fact, in 2023 Carnival Corporation provided shareholders up to $250 in onboard credit – but that offer ended on February 28, 2024. This article walks you through changes to the new 2024 Carnival Shareholder Benefit along with big updates to the process requesting benefits. To be clear, I still believe Carnival is an extremely risky business to own. As of Feb. 29, the company had a massive debt load of $31 billion.

Learn which stocks have the most short interest and how to trade them. Carnival’s 9 brands provide access to a wide range of cruising styles and destinations including the Caribbean, Alaska, Australia, New Zealand, Hawaii, England, and ports in Asia. The company is headquartered in Miami, Florida and has offices around the world. The company also has the distinction of being the only company included in both the S&P 500 and FTSE 250 indices.

For what it's worth, Wall Street believes the good times won't last very long. Analysts see annual revenue gains shrinking going forward, with fiscal 2026 sales rising by just 1.9% compared to the prior year. Now that the company has bounced back and looks to be on solid footing, I'm sure it's starting to catch the attention of investors. Warren Buffett, who many consider the greatest investor ever, once said that he believes the mark of a wonderful business is one that can raise prices with minimal pushback from customers. Rick Munarriz has no position in any of the stocks mentioned.

2024 Carnival Shareholder Benefit valid through December 2024 This Cruise Life

Table Of Content

• Is Carnival Cruise Lines profitable?
• Carnival plc
• Investors Chronicle View
• Carnival Shareholder
• Stock splits
• Profitability
• NYSE: CCL

This puts Arnold W. Donald in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. Carnival Co. &'s stock was trading at $18.54 at the beginning of the year. Since then, CCL stock has decreased by 19.6% and is now trading at $14.90. In April 2022, Carnival said the week ending April 3 was the busiest for bookings in company history, up more than 10% from the prior record. The last of Carnival Cruise Line's 23 ships returned to service on May 2.

Is Carnival Cruise Lines profitable?

This doesn't mean that it's not a good time to walk the gangway and board Carnival before the ship starts sailing again. Let's go over some of the reasons why right now could be a good time to warm up to the top player in watery adventures. One of last year's biggest winners has been taking in water this year.

Carnival plc

Tour and Other segment represent the hotel and transportation operations of Holland America Princess Alaska Tours and other operations. Holland America Princess Alaska Tours is a tour company in Alaska and the Canadian Yukon, which complements its Alaska cruise operations. The Company’s cruise line brands offer a range of vacation options for guests with a variety of leisure-time activities. The company's world-class and steadily improving fleet puts it in a strong position to capitalize on robust and growing demand for cruising.

Why Carnival Corp. Stock Sank by Almost 11% in January - The Motley Fool

Why Carnival Corp. Stock Sank by Almost 11% in January.

Posted: Mon, 05 Feb 2024 08:00:00 GMT [source]

Investors Chronicle View

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. The Company’s segments include North America and Australia (NAA) cruise operations, Europe and Asia (EA) cruise operations, Cruise Support, and Tour and Other. NAA cruise operations include Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), and Seabourn. The EA segment includes Costa Cruises (Costa), AIDA Cruises (AIDA), P&O Cruises (UK) and Cunard. Cruise Support segment includes its portfolio of port destinations and other services, all of which are operated for the benefit of its cruise brands.

In fiscal 2023, which ended Nov. 30, the company reported revenue of $21.6 billion, a record figure that was up 77% year over year. This number exceeded the previous record, which came in fiscal 2019. Carnival may have been profitable in just one quarter over the last four years, but look where the ship is headed.

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. 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. During that 12-week stretch, the company hit a first-quarter record for sales. Key to this strong momentum is, without a surprise, robust demand from consumers.

Speaking of the economy, demand for cruise trips demonstrates cyclicality, as it's a discretionary purchase. I'm concerned about how Carnival will fare in a potential recessionary scenario, which could happen unpredictably. Does this setup on the dip make Carnival a once-in-a-generation investment opportunity? Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

Profitability

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. 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.

NYSE: CCL

The company had to sell stock and issue debt to stay afloat. You can buy shares of Carnival directly through any brokerage account. The cruise ship operator trades under the stock ticker CCL. 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. That's hindering its ability to grow shareholder value through dividends, share repurchases, and new investments.

Revenue rose 22% to $5.4 billion, narrowly missing Wall Street's top-line target. Carnival finally hurdled its previous pre-pandemic peak for the fiscal first quarter. Most of Carnival's slide this year happened after it posted mixed financial results late last month. The shares did inch higher the day after the company announced its fiscal first-quarter results four weeks ago, only to slide 17% after the initial move up. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. However, the company suspended its dividend in March 2020 to conserve cash because of the pandemic's impact on its operations.

A lot of this capital was raised to buy the company time throughout the pandemic. But that's a huge burden that adds tremendous financial risk should there be economic weakness. It reduced its leverage by another $1.8 billion so far in fiscal 2024. Tackling debt that is about to come up or at the highest rate is going to make things a lot easier for the cruise line giant. Just imagine how easy things will get when rates start to move lower and its improving credit quality gets going.

The company operates 87 ships visiting more than 700 ports worldwide and catering to nearly 13 million passengers each year. The horizon gets even more snapshot friendly if you look out even longer. Analysts have been jacking up Carnival's fiscal 2025 prospects with every passing quarter. Wall Street pros are now modeling adjusted earnings of $1.42 a share for the next fiscal year that starts in December. Yes, the slide in Carnival's stock this year finds it now fetching just 10 times next fiscal year's profit target. An alternative to investing directly in Carnival by purchasing shares is to consider passively investing in the company through an exchange-traded fund (ETF) that holds shares.

When people have a little extra cash, they indulge in offerings from these companies. Carnival could complete a reverse stock split to help reduce its outstanding share count. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer. Upgrade to MarketBeat All Access to add more stocks to your watchlist.

Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The leading cruise ship operator is benefiting from the growing demand for cruises. That should enable the company to increase profits and cash flow in the coming years. Before the pandemic, Carnival was a very profitable company. The company reported $3 billion of adjusted net income in 2019, which matched its previous record high in 2018.