Top Cruise Line Stocks To Watch In September 2020
Cruise line stocks have been one of the worst-hit due to the coronavirus pandemic. It’s expected that international travels will only be limited to essential travels and everything else, apart from leisure purposes. As an investor, it’s perfectly reasonable for investors to worry about such issues. Along with the airline sector, the sharp decline in the cruise line businesses will find it difficult to resume to pre-pandemic levels in any meaningful way soon. American Airlines (AAL Stock Report) and Delta Air Line (DAL Stock Report) were on the rise on Thursday despite the market sell-off. However, some of the biggest cruise line stocks climbed on Thursday as the U.S. financial markets sank. The gains were driven in part by Carnival’s plans to resume sailings out of Italy this weekend.
Considering that most cruise companies haven’t operated a single voyage since the outbreak of the pandemic, there are reasons to be optimistic in the industry. If you are worried that cruise companies are going out of business, don’t. Despite the pandemic, cruise bookings continue to rise, even for 2021. One important thing to note is that the three biggest cruise line companies aren’t in imminent danger of bankruptcy, let alone collapsing completely. With that in mind, would you add these top cruise line stocks on your watchlist now?
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Top Cruise Line Stocks To Watch: Carnival
First, up the list, Carnival (CCL Stock Report) (CUK Stock Report) led the cruise line pack higher on Thursday. This came after Carnival-owned Costa cruises will restart voyages out of Italy on September 6 and Germany on November 1. Of course, there will be social distancing on board, such as reduced passenger capacity and enhanced safety measures, all of which are designed to reduce the possibility of another outbreak in the cruise. With Abbott Laboratories’s (ABT Stock Report) 15 minutes testing kits expecting to roll out soon, CCL stock is a cruise line stock to watch in the near term.
Since March, Carnival has raised over $10 billion through a series of financing transactions. As we speak, the company continues to make debt financing. However, the money raised today will translate into tomorrows’ interest expenses, and that means lower profits. Something to note is that even if we have a successful vaccine or treatment that could help curb the outbreak. Investors have to keep in mind that a lingering recession will keep prices in check, even with fewer ships in Carnival’s portfolio.
Top Cruise Line Stocks To Watch: Royal Caribbean
Royal Caribbean (RCL Stock Report) is the most appealing cruise stock to have in the battered cruise line industry. Wall Street analysts love this stock the most compared to the other two cruise stocks on the list. The reason could be because Royal Caribbean appeared to be the strongest cruise ship business in the quarters preceding the Covid-19 pandemic. This is thanks to its focus on customer satisfaction and on creating novel experiences like its exclusive island resorts. This allowed the company to attain better pricing and occupancy trends than the other major cruise companies.
RCL stock was trading at $135 a share back in January. As of September 4, RCL stock price is at $70 a share on average. The RCL stock price is up more than 200% since March lows of $22 a share over a span of 5 months. Despite the strong rebound, RCL stock is still trading at half the value compared to the start of the year. As the cruise business can resume in a meaningful way when the global health crisis is over, this makes Royal Caribbean one of the top cruise line stocks to watch.
Top Cruise Line Stocks To Watch: Norwegian Cruise Line
The final cruise line stock to watch is Norwegian Cruise Line Holdings Ltd. (NCLH Stock Report). Norwegian Cruise Line Holdings Ltd. Is the third largest cruise line company in the world. The corporation owns 8.7% of the cruise ship industry. Like other cruise line stocks in the market, NCLH stock is trending. That’s because of Carnival’s resumption of their cruise business in Europe this year.
The cumulative bookings and pricing for the next year are within historical ranges. That’s certainly promising. With a total liquidity position of $2.5 billion, the company will have no problems going through the next few quarters. Now, the company’s monthly cash usage is $160 million. It can survive for more than one year even without any income.