News – UK – What happens to Carnival Stock?

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BRAZIL – 05/2020/18: This photo image shows a Carnival Corporation logo on an image [] smartphone (photo illustration by Rafael Henrique / SOPA Images / LightRocket via Getty Images)

Carnival (NYSE: CCL), the largest cruise line company, has seen its inventory increase by around 12% since early 2021. Here’s a quick rundown of some of the latest developments for the company.First, Carnival further shifted its cruise timeline in late January the company announced it had paused operations from the US until the end of April and canceled operations in Australia until mid-May, although some of its ships are expected to return to Europe in March Overall, we think it is safe to assume that business is going on the company’s not until later that year when much of the US Population likely to be vaccinated against Covid-19, which would mean the company is likely to miss out on the summer cruise season, which is usually the busiest

Earlier this month, Carnival said it would raise an additional $ 3.5 billion Debt on senior unsecured notes maturing at a rate of 575% per annum in 2027 Although the company finished its last fiscal year with cash and cash equivalents of $ 9, Carnival is taking no chances as it may take a while to get business back on the line Level before Covid returns This equates to 18 months of liquidity based on a cash burn rate of $ 500 million per month in the fourth quarter. In addition, the company is likely to incur significant reboot costs if it goes back to business of debt will jeopardize the company’s business in the short term, but we anticipate this will severely limit long-term returns for shareholders Including the recent debt issue, Carnival would have raised over $ 22 billion in liquidity in the last 12 months alone , and interest costs should weigh on the company

Check out our dashboard to see how Carnival shares did during the 2008 recession compared to the previous year, the Coronanivurs crisis

Carnival (NYSE: CCL) stock is up nearly 60% in the past two months as investors saw news of the effectiveness of Covid-19 vaccines and the start of dosing in the U.S. As a sign of the beginning of the end of the Covid-19 pandemic, the share price surge is largely justified with Carnival and other cruise stocks bearing the brunt of the pandemic Carnival suspended cruises in March 2020 and burned around around monthly cash from the third quarter $ 770 million with the pandemic uncertainty easing, are there more gains in Carnival stock tickets, still down about 50% from February 2020?

We think it’s unlikely to hit the $ 40 mark by February 2020 anytime soon for a number of reasons, while Carnival initially attempted to set sail from U.S Ports in late 2020 it postponed its schedules as coronavirus infections in the U.S. continue to rise and the cruises will be interrupted at least until the end of February 2021.In addition, the vaccine rollout in the US. Also not moving as fast as expected due to initial hiccups. Even if Carnival resumes, it remains uncertain how quickly demand will recover. Removal of capacity from the fleet and delays in the delivery of new ships could also limit supply is that long-term profitability remains a concern. Carnival doubled its debt (total debt of around $ 21 billion as of the third quarter versus around $ 11 billion last year) as a result of the pandemic to add to its massive cash burn finance This will lead to higher interest costs, which will likely reduce profitability. In our interactive dashboard, we compare Carnival’s stock performance during the current crisis to that during the 2008 recession

After the Covid-19 pandemic, Carnival could see a sizable upward trend if the company tackles its current challenges and continues to pick up demand through 2021. The stock is currently trading at around $ 15 and has lost about 70% of its value since the start of the year as the coronavirus pandemic has essentially brought the cruise business to a standstillS. I haven’t sailed in the past seven months, although most cruise lines are looking to resume some level of operations from December onwards. The stock was trading at around $ 44 per share in February when the pre-Covid markets peaked and is currently around 65% below that level Even so, the stock is up roughly 28% from its March 2020 lows, reflecting some progress in bolstering its liquidity and the multi-billion dollar stimulus package announced by the S. Government that has helped the stock market in general rebound largely Our analysis of the company’s upside is based on our detailed analysis comparing Carnival’s stock performance during the current crisis to that during the 2008 recession

CCL stock declined from around $ 49 in October 2007 (the pre-crisis peak) to around $ 20 in March 2009 (when the markets bottomed out), meaning the stock was up to 60% of its time Value of its value lost approximate peak pre-crisis This was a larger drop than the broader S&P, which was down about 51%, but CCL rebounded strongly after the 2008 crisis, rising to around $ 32 by the end of 2009 Between March 2009 and January 2010 it rose by 62%. In comparison, the S&P recovered by around 48%

in the same period
Carnival revenues soared from approximately $ 164 billion in FY16 (fiscal years ended November) to approximately $ 21 billion in FY19 as cruise demand rose and the company’s earnings also rose sharply during the reporting period from around $ 3 USD70 per share to approx $ 430 per share The picture changed dramatically in 2020, however CCL reported a 99% year-over-year decline in sales for December 31, 2020 Quarter ending August with a net loss of around USD 2.8 billion.Full year sales for FY20 are projected to decrease by over 70% and it is very likely that it could take over a year for sales to return to pre-Covid levels, provided there are no significant changes in consumer behavior, however, it is likely that customers will be somewhat concerned about cruises for some time after the pandemic, considering the US. CDC has indicated that cruise passengers are at increased risk for the spread of infectious diseases from person to person

Carnival’s total debt increased from approximately $ 9.5 billion in FY 16 to nearly $ 25 billion at the end of the third quarter of FY 20, while total cash and cash equivalents rose from approximately $ 600 million to $ 8 While the company’s cash flow from operations rose from around $ 5 billion in 2016 to $ 5 billion in 2019, $ 2 billion rose over the same period as the company raised funds to weather the crisis operations are now largely shut down, the company has burned cash, forecasting a monthly surplus of $ 500 million for the fourth quarter.Although the Carnival budget seems adequate at the moment, it could be tough if it does by summer Will not set sail in 2021 and occupancy will rise There are also significant longer-term concerns as the debt burden of the Company is increasing and profitability is likely to be an issue given the higher interest burden, even if demand rebounds significantly

While Carnival stocks rebounded sharply after the 2008 financial crisis, things could be different this time, given the current high cash burn rate, uncertainty about how quickly demand will recover from the pandemic, and the massive debt burden that is rising This means that if the pandemic subsides and demand begins to rebound, the stock could rebound significantly, although we think it’s unlikely to hit $ 40 anytime soon -Levels will reach

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Carnival Corporation & plc, Stock, NYSE: CCL, Cruise Ship

News – UK – What happens to Carnival Stock?
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Source: https://www.forbes.com/sites/greatspeculations/2021/02/22/whats-happening-with-carnival-stock/