I feel like it’s been a little while since I’ve seen stock discussion regarding cruise lines in this sub. Cruise lines had record breaking bookings this quarter, beating estimates. Carnival (CCL) is up 80% YTD and Royal Caribbean (RCL) is up 109% YTD. A few analysts have recently upgraded from Hold to Buy. The one head scratcher to me is Norwegian Cruise Line (NCLH), only up 18% YTD.
I understand the argument is that during COVID, cruise lines accumulated ton of debt but in 2023 we have seen cut in debts as interest has risen. Carnival stated they have a 3-year plan to reduce debt with 3 ships coming in 2024, 1 ship in 2025 and 0 ships in 2026 it will allow them to use a ton of free cash flow to cut debts in the future.
Other looming threats = fuel pricing from war and other factors.
\- Carnival is focusing on reducing fuel usage, with having a 16% reduction in unit consumption of fuel in 2023.
Pre-covid, CCL was sitting around $50 and now is trading under $15. RCL was at $135, now at $106. NCLH was at $59, now under $15 as well.
I think I’m the most bullish on Carnival as a long-term buy/hold, as I like the direction CEO Josh Weinstein is taking the company.
Thoughts?
