Carnival stock forecast: is Carnival stock a good buy?

Can the Carnival stock forecast get back on track after a difficult 18 months?

Contents

The Carnival share price forecast was pretty grim in 2020. Much of this can be linked back to February and March, the early days of the coronavirus pandemic, when there were mass outbreaks on cruise ships operated by rival companies. Research suggested that these enormous vessels were “Petri dishes” for Covid-19 that caused infection rates to spike.

Even though the company made a concerted effort to introduce aggressive cleaning measures on board its ships, operations were forced to halt, including during the lucrative summer months. One major draw to international cruises is the opportunity to disembark in a new country every day and experience different cultures and cuisines. With many nations heavily restricting foreign arrivals, this has not been possible, and only a modest number of services were able to operate in the Mediterranean.

To add context to the Carnival stock forecast, let us take a look at how the CCL share price has fared over the course of 2020 and 2021.

Trading in London, the stock hit 52-week highs back in January 2020, reaching 3,728p. But when the full threat of COVID-19 became clear, the stock lost 84.4% of its value, crashing as low as 581p. Although the stock more than doubled from this low point, closing 2020 at 1,367p, this was still 62.9% off its high-water mark for 2020.

This year has been better for Carnival, although the current CCL stock price is still down from its pre-pandemic levels. The best figure this year was 1,890.20p, which was the intraday high on 9 June. Since then, the price has been on a consistent downward trend, hitting 1,512.20p on 12 July.

As the company continues to recover from an annus horribilis, how is the Carnival share price forecast for 2021 and beyond shaping up? Here are some of the key factors driving the stock for the coming year, as optimism grows that the rollout of COVID-19 vaccines will unlock pent-up demand.

Carnival stock news: burning through cash

The Carnival stock forecast reflects the financial impact that the Covid-19 pandemic has had on the travel company’s bottom line. Although the brand has attempted to mitigate cancelled voyages by offering vouchers for future journeys and discounts on extras, a sizeable number of passengers have requested full refunds. 

Despite the comparatively bright horizon offered by global vaccine rollouts, there have still been problems for the company. In its report for the second quarter of 2021, published 29 June, the business announced it had lost $2.1bn across the three months.

However, Carnival’s cash burn across the first half of 2021 was better than predicted because of proceeds from ship sales and changes to working capital. There was cause for optimism with the news that 42 ships, representing eight of the company’s nine brands, were either back, or would be back, in business by the end of the financial year. Carnival ended the second quarter with $9.3bn of cash and short-term investments, which it said would provide it with sufficient liquidity to return to full cruise operations.

In a statement, Carnival said:

“The company's monthly average cash burn rate for the first half of 2021 was $500 million, which was better than forecasted, primarily due to the timing of proceeds from ship sales and working capital changes. This monthly average cash burn rate includes revenues earned on voyages, ongoing ship operating and administrative expenses, restart spend, working capital changes (excluding changes in customer deposits), interest expense and capital expenditures (net of export credit facilities), and excludes scheduled debt maturities as well as other cash collateral to be provided. As the company continues to resume guest cruise operations, it expects to incur incremental spend relating to bringing ships out of pause status, returning crew members to its ships and implementing enhanced health and safety protocols.”

Carnival’s chief executive, Arnold Donald, took an optimistic view, saying:

“Despite our minimal advertising spend, we continue to experience an acceleration in booking trends globally, including capturing significant latent demand for our new sailings this summer. This strong demand affirms confidence in our future. In addition, customer deposits grew this past quarter, a significant milestone on our path to resumption. With the aggressive actions we have already taken to optimize our portfolio and reduce capacity, we believe we are well positioned to capitalise on pent-up demand and to emerge a leaner, more efficient company, reinforcing our global industry-leading position.”

Carnival stock forecast: buy or sell?

Looking at the CCL share price forecast for the next 12 months reveals an apparently cautious picture, with many analysts taking a “wait and see” approach while vaccines are rolled out and travel restrictions are lifted.

According to CNN, the median Carnival share forecast for 2021’s remainder and the first six months of 2022 anticipates a rise from its US current price of $24.25 to $27.98, up 15.4%. 

However, there are optimistic analysts out there who believe a 69.1% jump to $41 is achievable. The most pessimistic outlook among the CCL stock forecasts sees a 12-month drop of 39.4% to $14.70.

This cautious Carnival stock forecast also extends to recommendations. Of 21 analysts polled by CNN, seven make buy recommendations, eight have a hold rating, one believes that CCL is likely to underperform in the year ahead and five recommend sell.

Assuming that everything goes to plan on the vaccine front, it is likely that we will begin to see Carnival voyages return to normal in the latter part of 2021. What remains to be seen is how quickly the business will recover, not least because a substantial number of customers are still reluctant to set sail. With COVID-19 still affecting millions of livelihoods, a recession may mean some travelling demand will not return for several years.

CCL price history

Date Close Change Change(%) Open High Low
Nov 26, 2021 17.87 0.35 2.00% 17.52 18.32 17.13
Nov 25, 2021 20.08 -0.06 -0.30% 20.14 20.14 20.08
Nov 24, 2021 20.12 0.04 0.20% 20.08 20.56 19.68
Nov 23, 2021 20.05 -0.12 -0.59% 20.17 20.74 19.93
Nov 22, 2021 20.17 -0.30 -1.47% 20.47 20.82 20.06
Nov 19, 2021 20.37 -0.55 -2.63% 20.92 20.95 19.78
Nov 18, 2021 20.88 -0.29 -1.37% 21.17 21.57 20.49
Nov 17, 2021 21.13 -0.45 -2.09% 21.58 21.75 20.90
Nov 16, 2021 21.56 -0.50 -2.27% 22.06 22.43 21.25
Nov 15, 2021 22.11 -0.16 -0.72% 22.27 22.63 22.05
Nov 12, 2021 22.27 -0.69 -3.01% 22.96 23.01 21.97
Nov 11, 2021 22.96 -0.35 -1.50% 23.31 23.53 22.88
Nov 10, 2021 23.31 -0.68 -2.83% 23.99 24.23 23.19
Nov 9, 2021 23.99 -0.39 -1.60% 24.38 24.70 23.62
Nov 8, 2021 24.40 -0.27 -1.09% 24.67 24.96 24.34
Nov 5, 2021 24.65 0.42 1.73% 24.23 25.18 24.00
Nov 4, 2021 22.77 -0.43 -1.85% 23.20 23.39 22.63
Nov 3, 2021 23.06 0.51 2.26% 22.55 23.23 22.48
Nov 2, 2021 22.81 -0.06 -0.26% 22.87 22.97 22.46
Nov 1, 2021 22.96 0.79 3.56% 22.17 23.00 21.91

FAQs

It depends on how you look at things. If you want a stock in an industry that’s currently performing well, or at least recovering from the pandemic, then probably not. However, if you think the cruise industry can recover, then it might be. At present, some optimistic analysts’ CCL stock predictions recommend buying, although more than as many disagree. As always, you should do your own research, remember that the value of stocks can go up as well as down and never invest more than you can afford to lose.

Yes, it does, but it has not paid a dividend since 2020. The current state of the cruise industry, coupled with debts that the company has to pay, means shareholders should not expect to see any dividends for a little while yet. The last dividends, worth $0.50, were paid on 13 March 2020.

Carnival stock is dropping because the cruise industry has been hit hard by the coronavirus pandemic. Ships are unable to accept passengers, which means the company is losing money. Also, news that it had made a tender offer for its 11.5% senior secured notes due 2023 subject to refinancing conditions means that, in effect, its share price would fall, has not helped matters.

Trade Carnival shares today in tokenised assets at Currency.com. Tokenised assets are crypto derivatives whose value is linked to the value of a particular asset. Currency.com offers the opportunity to buy with leverage, and you can easily define stops and limits to request positions to close at a specified price.

Trade Carnival - USD - CCL stock price

Carnival - USD
Daily change
17.87
Low: 17.14
High: 18.16

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