Casinos & Hotels

Rough Seas Ahead for Carnival With Cruise Cancellations

Carnival Corp. (NYSE: CCL) shares sank on Wednesday after the cruise line operator announced that it would be canceling cruises for the first part of 2021. Carnival wasn’t the only stock that felt the sting of these cancelations.

Carnival is canceling all embarkations from U.S. homeports for the month of January. Additionally, embarkations from Baltimore, Charleston, Jacksonville, Long Beach, Mobile, New Orleans and San Diego will be canceled through the end of February. Also, embarkations on Carnival Legend out of Tampa will be canceled through March 26.

Carnival previously canceled operations in Australia through March 2, 2021.

In total, 16 Carnival ships are currently following the CDC process for an eventual resumption of guest service in the United States in 2021.

The company previously canceled certain other itineraries on four ships (Magic, Paradise, Valor and Victory/Radiance) that are scheduled for required dry docks in the first half of 2021, with the plan to return them to operations after maintenance work and upgrades are completed.

Both Royal Caribbean Group (NYSE: RCL) and Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) had sympathy pains for Carnival’s cancellations. However, Norwegian Cruise Line is in the midst of a capital raise via a secondary offering.

Norwegian Cruise Line is offering 40.0 million shares at a price of $20.80 apiece, implying an aggregate value of $832 million for the offering. The cruise company has a total market cap of roughly $5.73 billion. It expects to use the net proceeds from the offering for general corporate purposes.

Carnival stock traded down about 3% to $17.55 on Wednesday, in a 52-week range of $7.80 to $51.94. The consensus price target is $16.69.

Royal Caribbean traded down about 1%, at $74.82 in a 52-week range of $19.25 to $135.32. The consensus analyst target is $59.23.

Norwegian Cruise Line stock was down about 5% to $21.04. The 52-week range is $7.03 to $59.78, and analysts have a consensus price target of $19.85.