Table Of Content
Carnival Co. &'s stock is owned by a number of institutional and retail investors. Insiders that own company stock include Arnold W Donald, David Bernstein and Randall J Weisenburger. The company’s growth hit a new stride in 1987 following the IPO which floated 20% of the company on the open market. The proceeds from the IPO allowed the company to embark on a voyage of acquisition and now Carnival is the world’s largest travel and leisure business. Carnival suspended cruise operations in March 2020 after the COVID-19 pandemic struck.
Carnival Corp & plc paired Past Events
This comes just a couple of years after a 15-month pandemic era shutdown led to questions about whether the industry could ever r... The company began as Carnival Cruise Line, formed in 1972 by Ted Arison. It made an initial public offering (IPO) of 20% of its common stock in 1987. Carnival Corp. was incorporated in Panama in 1974, while Carnival plc was incorporated in England and Wales in 2000.
Analyst's Opinion
While profits plateaued in 2019, they steadily grew in the years before then and had more than doubled their total from 2013. With the company working hard to improve earnings while growing its fleet, it could eventually set a new profitability record. 20 brokers have issued 12-month target prices for Carnival Co. &'s shares. On average, they expect the company's stock price to reach $21.47 in the next twelve months.
Should you invest $1,000 in Carnival Corp. right now?
That should enable the company to continue paying down debt. Carnival anticipates delivering $8 billion in net debt reduction between 2024 and 2026, helping to reduce its interest expenses and take the pressure off its balance sheet. Carnival has been working hard to shore up its financial foundation since it resumed cruises in the middle of 2021.
Why Carnival Cruise Line Stock Jumped 29% in October
New ships cost a ton of money to build, staff, and maintain, and Carnival's debt is putting a cap on fleet expansion. Management has stated that they're pulling back on spending to pay down debt. Three new ships will be delivered next year, but none will come in 2026, and just one in 2027. Shares of Carnival (CCL 1.88%) (CUK 2.16%), the world's largest cruise line operator, moved higher last month. The company rebounded from a disappointing earnings report at the end of September, and macro-level news seemed to lift the battered travel stock. To be clear, I still believe Carnival is an extremely risky business to own.
Does Carnival Cruise Lines pay a dividend?
According to ETF.com, 141 ETFs held more than 96.7 million shares of the cruise line as of mid-2023. Carnival Co. &'s stock was trading at $18.54 on January 1st, 2024. Since then, CCL shares have decreased by 23.0% and is now trading at $14.27.
Carnival Management
It will take the company several years to get debt back down to a more comfortable level. That's hindering its ability to grow shareholder value through dividends, share repurchases, and new investments. Although they have lots of upside potential, they also have lots of risk. An alternative to investing directly in Carnival by purchasing shares is to consider passively investing in the company through an exchange-traded fund (ETF) that holds shares.
Carnival Corp. (CCL) shares turned higher in intraday trading Wednesday after the cruise line posted a smaller adjusted first-quarter loss than analysts expected. I don't believe investors should expect Carnival stock to more than double in 2024 like it did in 2023. Rather, I believe that investors should focus on the business. Two of the best things happening right now are the company's full ships and the speed of its debt repayment.
Can Carnival Stock Cruise Higher After Q1 Earnings? - Markets Insider
Can Carnival Stock Cruise Higher After Q1 Earnings?.
Posted: Mon, 25 Mar 2024 07:00:00 GMT [source]
Profitability
Wednesday's Fed rate hike also showed that a pivot is probably further away than Carnival investors had hoped. Travel demand should continue to come back, barring a recession, but a return to profitability will take longer. Investors interpreted that as good news for the cruise industry as a whole.
As of Feb. 29, the company had a massive debt load of $31 billion. A lot of this capital was raised to buy the company time throughout the pandemic. But that's a huge burden that adds tremendous financial risk should there be economic weakness.
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Carnival relaunched cruises from the U.S. on July 3, 2021, when the Carnival Vista departed from Galveston, Texas. These include pre-cruise questionnaires and testing for vaccinated guests, and proof of vaccination required at terminals in advance of boarding. As it ended 2023, Carnival said that it was in its best booked position ever -- demand for cruises has been exceptionally high and it introduced 3.5 million people to cruises last year.
It has been steadily repaying debt and plans to continue doing so. It also continues to invest money to refine its fleet, which will see eight new ships delivered across its brands through 2025. Like many travel stocks, Carnival had to navigate some rough seas during the COVID-19 pandemic. The cruise line company ceased operations for several months, which had a devastating financial impact. The company had to sell stock and issue debt to stay afloat.
The current corporate structure is the result of Carnival's merger with P&O Princess Cruises in 2003. On April 22, 2003, Carnival Corp. and Carnival plc began trading on the NYSE and LSE respectively. Atypically high occupancy levels are helping Carnival's profitability and allowing it to reduce its substantial debt load at an encouraging pace. In fact, on Jan. 22 it announced that it had repaid all of its second-lien debt, which is great news. These notes weren't due until 2027, but they had a nearly 10% interest rate. Wiping them out gets it closer to a more sustainable debt burden.
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