Connect with us

Hi, what are you looking for?

Investing

Carnival stock has surged, but is CCL still a good buy?

Carnival Corporation’s (NYSE: CCL) shareholders have seen substantial gains, with the stock price rising over 52% in the last year, significantly outperforming the S&P 500’s 22% increase.

This surge might make potential investors wonder if they’ve missed the boat on Carnival’s shares, or if the company’s recovery trajectory suggests further growth ahead.

The pandemic’s impact and CCL’s subsequent rebound

The cruise industry was hit hard by the pandemic, with restrictions and health concerns causing a steep decline in travel.

Carnival’s revenue plummeted by 73% to $5.6 billion in fiscal 2020, resulting in a loss of $10.2 billion, compared to a profit of $3 billion the previous year.

However, as travel restrictions eased and consumer confidence returned, Carnival experienced a robust rebound.

For the quarter ending February 29, the company reported an occupancy rate of 102% and increased ticket prices, driving revenue up 22% year-over-year to $5.4 billion.

Source: TradingView

Current outlook and future uncertainties

Carnival’s management is optimistic, citing record-high bookings and improved pricing and occupancy rates for the upcoming year.

However, the broader economic context presents uncertainties.

Slowing GDP growth and ongoing high interest rates raise concerns about a potential recession, which could impact discretionary spending on travel and leisure activities such as cruises.

Valuation and investment considerations

Despite the strong recovery in Carnival’s stock price, its price-to-sales ratio remains at 0.8, consistent with levels from a year ago and reasonable compared to its 10-year history.

This suggests that the stock may still be valued fairly despite recent gains.

However, the cyclicality of the travel and leisure sector, combined with macroeconomic risks, advises caution.

Investors are encouraged to monitor the economic indicators and Carnival’s performance closely.

Long-term investors might find Carnival an attractive option if the stock’s valuation becomes even more favourable and the economic outlook stabilizes.

The post Carnival stock has surged, but is CCL still a good buy? appeared first on Invezz

You May Also Like

Editor's Pick

In Risky Business: Why Insurance Markets Fail and What to Do About It (Yale University Press, 2023), economists Liran Einav (Stanford), Amy Finkelstein (MIT),...

Editor's Pick

If you haven’t been following the “Twitter Files” saga, the gist of it is that the US federal government routinely pressured pre-Musk Twitter, and...

Editor's Pick

For years the North Korean playbook was obvious to the world. The Democratic People’s Republic of Korea wanted to be the center of attention....

Editor's Pick

On April 23, 1985, the Coca-Cola Company made one of the biggest mistakes in American business history: it changed the formula for Coca-Cola. Outraged...



Disclaimer: Questofprogress.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


Copyright © 2023 Questofprogress.com