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Carnival Corp. Stock Jumps as Bookings Double

Story Highlights

Carnival Corp. is attracting more guests with relaxed travel norms. The cruise line is witnessing record bookings compared to 2019 levels.

Shares of Carnival Corp. (NYSE: CCL) rose 6.3% yesterday after the American cruise line operator announced that booking activity nearly doubled compared to 2019 levels, thanks to easing travel restrictions. Shares ended the day up 4.5% at $11.19 on August 16.

Although mid-August is not generally a busy time for cruise reservations, CCL experienced a surge in bookings and a favorable response to its flexible travel policies.

Carnival Cruise Eases Travel Restrictions

On August 12, Carnival announced new norms for voyages of less than 16 nights, effective September 6, 2022. These include no testing for vaccinated guests as well as eliminating the exemption request process for unvaccinated guests. Unvaccinated guests will only need to produce negative PCR or antigen test results taken within three days of embarkation. 

Christine Duffy, president of Carnival Cruise Line said, “We have previously disclosed strong occupancy projections for the summer, and our bookings through the end of 2022 have also been very solid… With the further alignment of protocols to other vacation choices, our guests are booking the remaining 2022 inventory, and getting a head start planning for 2023.”

Meanwhile, Carnival also reiterated that it will continue to work in coordination with the health and safety norms of all guests, crew, and communities it visits and develop responsible travel protocols.

Is CCL Stock a Buy?

On TipRanks, CCL stock has a Hold consensus rating based on four Buys, five Holds, and four Sells. The average Carnival Corp. stock forecast of $13.25 implies 18.4% upside potential to current levels. Meanwhile, CCL stock has lost 47.7% so far this year.

CCL is scheduled to report its third quarter Fiscal 2022 results on September 29. The consensus for earnings is pegged at a loss of five cents per share.

Will Carnival’s Sailing Momentum Continue?

Carnival recently announced a $1 billion equity raise to fund “general corporate purposes.” This news has not gone down well with investors. Plus, the company has a huge debt on its balance sheet, which makes for higher interest payments with an increasing interest rate scenario.

Despite the odds, Carnival Cruise is sailing happily into the summer season with peak demand. Moreover, the relaxed travel norms are making it more attractive for customers to sail with Carnival Cruise. All in all, currently, CCL may be sailing smoothly, but more clarity will be received in its earnings results next month.

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