For a while, it looked like Carnival Cruise Lines (NYSE:CCL) was doomed to failure as its entire operation was basically stymied by COVID-19. Yet there are plenty of signs that cruising is making a comeback as the restrictions are all but dead, hopefully, to stay that way forever. In fact, Carnival gained somewhat in Tuesday afternoon’s trading session on the back of a new bullish analyst stepping in.
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The latest CCL bull is Argus analyst John Staszak. Staszak stepped up from Hold to Buy thanks to some new marketing plans from Carnival itself. The rise in marketing spending, in turn, should produce new revenue. Carnival is able to engage in all that new marketing spending thanks to its rising liquidity, which is another good sign for the formerly beleaguered company in an equally beleaguered industry.
What kind of marketing moves has Carnival made? Well, among other things, Carnival has actively worked to improve its product. It’s dropped several older ships from the fleet and replaced them with more fuel-efficient models, which is always a good play, all else being equal. Carnival is also stepping up its food offerings, with help from Chief Culinary Officer Emeril Lagasse himself. Carnival also stepped back on taking out the VIFP Diamond Lunch, a special perk for Very Important Fun Club members. VIFP member backlash brought that one back, illustrating Carnival’s responsiveness to customers.
Yet, despite this, there’s still some uncertainty among analysts. With 10 Buy ratings, four Holds, and two Sells, Carnival is considered only a Moderate Buy. Moreover, thanks to the recent gains, Carnival Cruise Lines stock comes with a downside risk of 0.93%, thanks to its average price target of $18.03.
