Posted on 03/16/2021 11:37:34 AM PDT by Capt. Tom
What happened Tuesday should have been a good day for investors in the cruise ship sector. Bright and early this morning, analysts at investment bank JPMorgan raised their price targets across the industry, predicting that within a year, Carnival Corporation (NYSE:CCL) (NYSE:CUK) stock will sell for $33 a share, Norwegian Cruise Line Holdings (NYSE:NCLH) will rise to $36, and Royal Caribbean (NYSE:RCL) will hit $110 a share.
But then Norwegian Cruise dropped a weapon in the water and torpedoed the stock rally. As of 11:30 a.m. EST, Carnival stock is down 3.1%, Norwegian is down 3.3%, and Royal Caribbean is lowest in the water -- down 4.2%.
So what According to JPMorgan, lights are flashing green across the cruise ship sector. "We expect to see new CDC guidance" permitting cruise lines to resume at least trial cruises "relatively soon, and our sense is that specific instructions will generally be more agreeable than the last update in the fall," writes the analyst in a note covered by StreetInsider.com today. "We also expect a steady drumbeat of announced and ultimately successful ship launches in various places around the world into the spring and summer months ... as brands restart marketing programs."
Best of all, with demand for cruises looking strong, JPM predicts an "upward move to ticket pricing (which is the most important catalyst, to us)." And for every 5% ticket prices go up, the analyst forecasts a "~15%+ equity value" increase in the stocks.
So far, so good.
Now what But cruise ships will need to start cruising before they can actually collect on any pricier tickets they sell. Unfortunately, it seems that's going to take a bit longer than expected. In the latest in a series of disappointing announcements across the industry, this morning Norwegian Cruise Line Holdings announced that it is suspending "all voyages" across its several brands through June 30, 2021.
So far, it's only Norwegian pushing back cruising by one more month. At last report, Carnival and Royal Caribbean were still pausing their U.S. cruising only through the end of May 2021. For more than a year, however, these companies have been following each others' moves like ducks in a row. Chances are good that before the week is out we'll be seeing announcements of cruise postponements at Carnival and Royal Caribbean as well.
And that's why all three cruise stocks are sinking today.
To me it is amazing how many stock experts don't see the fate of the big 3 cruise lines in this country is in the hands of our incompetent and indifferent CDC, and not the cruise lines who have waited possibly to long now to scale down cruises from this country and homeported some of their ships elsewhere.-Tom
A picture is worth a thousand words. :)
That photo is a good example of:
“THE BIGGER THE BUNDLE , THE BIGGER THE BUNGLE. -Tom
I bought CCL and NCL and three airline stocks about a year ago. I’ve doubled my money.
Make sure the Captain is never an Italian.
Unless his last name is Columbus.
LOL
“THE BIGGER THE BUNDLE , THE BIGGER THE BUNGLE.”
I thought you were talking about Governor Cuomo.
For Costa, the cost of a Lothario officer’s lust for a lovely girl...
From “The Wit and Wisdom of Winston Churchill” by James C. Humes:
Late in his life, Sir Winston took a cruise on an Italian ship. A journalist from a New York newspaper approached the former prime minister to ask him why he chose to travel on an Italian line when the Queen Elizabeth under the British flag was available.
Churchill gave the question his consideration and then gravely replied: “There are three things I like about Italian ships. First, their cuisine, which is unsurpassed. Second, their service, which is quite superb. And then — in time of emergency — there is none of this nonsense about women and children first.”
“THE BIGGER THE BUNDLE , THE BIGGER THE BUNGLE.”
“I thought you were talking about Governor Cuomo.”
That statement applies to all of the things we have seen happen in this world and even in our own lives.
I am starting to sense the bigger the bundle the bigger the bundle problem arising in our massive vaccination problem where the unproven, in the long run vaccination, might become a yearly event, and have some detrimental side effect as the experimental vaccine is tweaked every year.
Think about how now they say talcum powder is a problem for women. Who knew? -Tom
later
The cruise industry in May of 2020, damaged and hurting but the refloat plan is in place!
The cruise industry in 1st quarter 2021, ok refloated but there is a lot of work left.
“The cruise industry in 1st quarter 2021, ok refloated but there is a lot of work left.”
And the curve balls keep coming. -Tom
The cruise stocks were bargain of the century just a few months ago. Cruises will be back with a vengeance is what I predict. It is too good of a deal to disappear.
And I have my vaccine passport, with two stickers QR code that is the actual “proof” the cards won’t be valid on face value only when that QR code is scanned and remote verified to match the identity of the person holding it will it be valid. The idea that people two sticker it has a QR code that is the actual “proof” the cards won’t be valid on face value only when that QR code is scanned and remote verified to match the identity of the person holding it will it be valid. The idea that people will just be able to make copies is false.
Is that picture from that ship whose captain was trying to impress his girl friend ashore and got to close to the shore?
The pent up desire to go cruising may come back strong, but the cruise lines IMHO will suffer a loss in the long run of passengers if the prices stay higher than normal, and the medial hassles continue on airplanes, hotels, boarding a cruise ship, medical protocols while onboard a cruise ship, or in visited ports and getting off a cruise ship. The bloom may come off the rose for some long time cruisers who can see the difference in cruising today as opposed to yesterday. Time will tell.
People who don't need to fly and have easier access to the cruise ships are in a better position to go but they are not going to be the economic mainstay of the past business for these Cruise lines, unless the Lines reduce their number of ships and reorganize. -Tom
Agree completely on needing flights to go on a cruise.
To coordinate flights, hotels, transport from airport to hotel and from hotel to cruise terminal was lot of work. Now we are 40 minutes from JAX cruise terminal and 90 minutes from Port Canaveral and it is so much easier. We can now even sign up a last minute deal.
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