In the midst of their earnings season, cruise stocks have been making a broad rally this week, primarily on hopes of reopening. Shares of Royal Caribbean Cruises (NYSE:RCL), Norwegian Cruise Line Holdings (NYSE:NCLH) and Carnival (NYSE:CCL) were all up in trading today as news around Covid-19 becomes more optimistic.
Pending FDA authorization of a Covid-19 vaccine by Johnson & Johnson (NYSE:JNJ) today has buoyed reopening bulls and associated sectors, and that enthusiasm has understandably carried over into cruise stocks. But these companies have their own catalysts to thank too.
RCL reported better-than-expected earnings on Monday, though it still came in at a loss with a revenue miss. In that earnings call, Royal Caribbean said that bookings for the first half of 2021 was in line with company predictions, and that bookings for the first half of 2022 were in line with pre-pandemic averages. The company also said that it anticipates the U.S. Centers for Disease Control will permit some trial voyages in the coming days.
Given an increase in pricing, these factors bode well for RCL specifically and suggest more positive sentiment for the industry broadly: shares of cruise stocks were up in intraday trading on Monday.
On Tuesday, Carnival announced it would be raising $1 billion from a public offering, which sent CCL stock slightly lower on the day. Tuesday’s announcement came after the company closed a $3.5 billion flotation of unsecured debt last week. That being said, Carnival is considered one of the riskier names in the sector.
Norwegian Cruise Line Holdings is set to announce earnings tomorrow morning; last week, NCLH dipped in trading as investors anticipate a less-than-stellar quarter. Like its peers, NCLH was also up in daily trading on Monday, but didn’t benefit quite as much from the rally as its competitors.
On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.
