Carnival Corp’s (NYSE:CCL) announcement that it has had its busiest booking week in history had a significant impact on the company’s stock. According to their stats, the company had a record-breaking week from March 28 to April 3, beating its prior best.
CCL stock gained nearly 4% in afternoon trading in response to the news. However, the euphoria did not last long since the very next day saw the stock giving away the gains. Investors might be thinking the sharp jump in bookings might also lead to substantial costs. Therefore, investors are taking a measured approach.
Because of advancements within cruise ship regulations, the Centers for Disease Control and Prevention (CDC) has lifted public safety and travel warnings. Now, they hope people will return to enjoying their time on a cruise.
Even though officials lifted the travel health notice, passengers still need to consider the risks when deciding whether or not to take a cruise. It’s up to them.
Nevertheless, the announcement comes as a welcome change for the industry. Cruise operators have said the CDC has discriminated against the industry for a long time when others, such as hotels and airlines, have returned online.
The argument makes sense. Travelers are yearning to get back into the swing of things. Carnival Corp has said that it had booked more for the second half of 2022 than in 2019, which the company hopes will revive the cruise industry after a disastrous season in the last two years. Therefore, it is time for investors to make a decision on whether to pull the plug on CCL stock.
Is CCL Stock a Buy, Hold or Sell?
One of the biggest casualties of the covid-19 pandemic, the cruise industry is still limping along. Carnival’s annual revenue for 2020 was $5.595 billion, 73.13% down from the previous year’s revenue. In 2021, the number fell to the worst recorded since 2008, coming in at just $1.9 billion.
However, the company foresees sunnier times ahead. The cruise line operator expects to become profitable again in the second half of the year. Carnival is able to resume its cruise operations, which offer a level of liquidity that they need to grow.
“Our cash from operations turned positive in the month of November, and we expect consistently positive cash flow beginning in the second quarter of 2022 as additional ships resume guest cruise operations,” CEO Arnold Donald has said.
Carnival said 22 out of 23 of its ships are operational again. The remaining boat was undergoing an inspection to determine potential additional repairs for the near future.
With stocks still needing to recover, CCL is a great buy right now. It’s already recovering and is a source of good returns on your investment.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.