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Bear of the Day: Carnival (CCL)


You don’t need me to point out the tough times that the cruise industry has had recently. COVID-related shutdowns have put the industry on ice. Ships are stuck in port with nowhere to go. Some folks on the fence about cruising have now sworn them off for good. It could take years for the industry to bounce back, and there is a risk that it never gets back to pre-COVID levels.

Today’s Bear of the Day is cruise operator Carnival (CCL). Carnival Corporation operates as a cruise and vacation company. As a single economic entity, Carnival Corporation & Carnival plc forms the largest cruise operator in the world. Carnival is the world’s leading leisure travel firm and carries nearly half of the global cruise guests. The company has operations on North America, Australia, Europe and Asia.

Analysts’ estimates of the downside action in earnings have been nothing short of devastating. You can see the dramatic shift in our Zacks Consensus Estimates. Over the course of the last ninety days, current year consensus has dropped from a $2.14 profit per share to a loss of $6.17. Recently, continued closings and more negativity from analysts has cut next year’s profit out of the equation as well. Ninety days ago, next year’s estimate was a profit of $3.44. Thirty days ago, that sunk to just 32 cents. Now, the Zacks Consensus Estimate for next year is down to a $1.97 loss.

That current year loss is a result of a painful dip in sales. This year, sales are forecast to come in 67.6% lower than last year. Next year, analysts are expecting a rebound. Sales for next year are forecast to come in at $14.04 billion, a 108.09% increase from this year.


p> While Carnival is a cruise ship operator, we have it in our broad Leisure and Recreation Services Industry. This industry ranks in the Bottom 23% of our Zacks Industry Rank. There are two stocks within this industry that are currently Zacks Rank #2 (Buy) stocks. Those stocks include RCI Hospitality (RICK) and Studio City (MSC).

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