Ready to set sail? It looks like Bank of America analyst Andrew Didora is ready to hit the seas. With a variety of catalysts driving him, he raised his price targets on Carnival (NYSE:CCL), Royal Caribbean (NYSE:RCL) and Norwegian Cruise (NYSE:NCLH). So what exactly do you need to know about CCL stock, RCL stock and NCLH stock here?
To start, what exactly did Didora say? Well, analyzing the state of tourism trends and the novel coronavirus, he is feeling more than a bit bullish on cruise stocks.
Here are five things you should note:
- Didora raised his price target on RCL stock from $34 to $60. That is a 77% boost.
- The analyst also raised his price target on NCLH stock from $18 to $25. That move is a nearly 40% boost.
- Additionally, Didora raised his price target 26% the United Kingdom listing for CCL stock.
- After hiking his price targets, these three cruise stocks all approached multi-month highs.
- Importantly, the analyst thinks a variety of catalysts including novel coronavirus vaccine news will boost cruise stocks moving into 2021.
So what exactly are those catalysts? Well, this week we saw the United Kingdom make history and grant emergency approval to a coronavirus vaccine from Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX). As it preps to start vaccinations next week, many investors are hoping that the United States and European Union extend that same emergency approval. Plus, coronavirus rival Moderna (NASDAQ:MRNA) is right behind, having completed its Phase 3 trials and filed with the U.S. Food and Drug Administration for emergency-use authorization.
With the hope of mass vaccination rising, investors are increasingly turning to pandemic rebound plays. What companies and sectors will benefit most from a return to normal? According to Didora, there may be no better bet than RCL, NCLH and CCL stock.
Cruise Stocks and the CCL Stock Surge
Remember, for the last several months, cruise stocks like CCL stock have floated on without any revenue, and without any sailings. In fact, some of these cruise lines were just starting to resume operations before the novel coronavirus ramped back up. However, even as cases and hospitalizations continue to rise, Didora thinks a coming vaccine should ease travel concerns and boost consumer confidence.
Additionally, we are already starting to see the ripple effects of this post-vaccine rebound. Yesterday, Rolls-Royce (OTCMKTS:RYCEY) turned around after a massive rout. Why? Once again, Pfizer and BioNTech deserve the credit. Investors started to piece together the narrative that, with a vaccine coming, airlines will soon resume travel as normal. As they do, demand for aircraft will increase and so too will demand for aircraft engines. That nice narrative boosted RYCEY stock on Wednesday.
Here, the story is similar. Once vaccinations start to roll out, consumers will take advantage of the newfound freedom. Cruises may be one of the first places they turn to escape. This should provide CCL stock, RCL stock and NCLH stock a nice turnaround story. That is why, with vaccine news coming daily, Didora thinks these cruise stocks are the best pure play.
Keep an eye on the water. As passengers start to travel, these shares could keep heading up.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.