Luxury cruise ship with 206 passengers runs aground in Greenland

cruise ship stocks

This means the potential for significant returns for investors who are willing to invest now. Whether their clients are sailing or located at a variety of travel and hospitality locations on-land, OneSpa is one of the major luxury spa providers for the highest-end hospitality brands. With the launch of Disney+, the company was able to take advantage of the huge demand for video streaming platforms, made even more popular by the pandemic.

Learning about business models and how they stack up against competitors in a given sector is a crucial component of sound investment. Cruise ships took longer to recover compared to other travel-related industries like airline or hotel stocks. Many popular cruise ports did not reopen until late 2021, just in time for Omicron to strike another blow, and this did not help. The international economy, hotels, airlines, and cruises all hope to see market performance closer to what they would have seen before the pandemic began. OneSpa is a holdings company that provides product solutions to cruise lines and other businesses in the hospitality industry.

We may receive payment from our affiliates for featured placement of their products or services. We may also receive payment if you click on certain links posted on our site. However, given rising interest rates, the company will likely have to refinance much of that debt at higher interest rates, even if it meets its debt-reduction goals. Though its operating expenses rose significantly, Carnival achieved a milestone by recording its first operating profit in years.

  • Investors looking to take on a little risk for significant returns should consider purchasing some of these cruise stocks.
  • Its ships are packed with state-of-the-art amenities, including virtual balconies, massive water slides, skydiving at sea, and even Broadway shows.
  • It became evident that a cruise ship wasn’t an ideal place to be in the middle of a pandemic.
  • It seems they may have gone public at one of the least advantageous times, considering the current performance of hospitality stocks.
  • Most recently, CCL reported positive developments in its second quarter (Q2) 2022 business update.

Royal Caribbean Group (formerly known as Royal Caribbean Cruises LTD.) is the second-largest cruise line in the world. Norwegian Cruise Line Holdings hopes to see a higher share price now that sailing has returned. Norwegian Cruise Line Holdings controlled about 8.6% of the world’s cruise passenger market in 2021. That mental framework pegs Norwegian’s 2022 revenues around $6 billion, and its profit margins around 10% to 12%.

In Q2, the operating income was $120 million, up from nearly $1.5 billion in operating losses in the year-ago quarter. In addition, an ETF fund eliminates the need to have a fund manager as it is rule-based. Data are provided ‘as is’ for informational purposes only and are not intended for trading purposes.

Carnival Corp. stock rises Monday, outperforms market

Their current performance has come as quite a surprise, showing us just how versatile, risk-averse, and diversified their stock really is. The company has two subsidiaries – Carnival Corporation, which operates in the US, and Carnival PLC, which operates in the UK. Investors may need to be patient with the amount of time they hold this stock (or any other hospitality stock, for that matter).

Most of its guests are small groups of affluent people who are extremely loyal. Most of its expeditions are expensive, ranging between $5,000 and $25,000, depending on the itinerary. Each of the cruise line stocks had astonishing gains for the first six months of the year, but they are still down significantly from the start of 2020.

Examples include the Vanguard 500 Index Fund (VFIAX) and the Fidelity 500 Index Fund (FXAIX). The cruise industry was one of the hardest hit tourism sectors amid the peak COVID years. However, CNN Travel expects a meaningfully smoother sail for cruises ahead. With this context and industry outlook in mind, let’s now take a look at the 10 best cruise stocks to buy now. We took into account hedge fund sentiment, fundamentals, future growth catalysts and analysts’ ratings while choosing these stocks.

These 20 companies are big winners this earnings season. What do analysts think about their stocks?

At the end of Q1 2022, revenues surpassed consensus estimates by $10.7 million to register $67.8 million, led by an increase in expeditions and trips. In that pandemic year, Carnival fell 57 percent, Royal Caribbean 44 percent, and Norwegian 56 percent. The companies had virtually no revenue and mounting debt, and their ability to remain going concerns was in doubt. They survived by taking on enormous debt loads and paying sky-high junk-bond yields, which were needed to attract investors.

cruise ship stocks

Norwegian offers a variety of cabin categories, which enables it to accommodate every type of traveler. It was the first cruise line to offer studios exclusively for solo travelers, and it has lodging fit for everyone from people sailing on their own to large families. This cruise line is still known for its reasonable prices and ability to offer a fun time for everyone.

Carnival Corporation

As Covid-19 swept around the globe, many were horrified to see outbreaks taking place aboard cruise ships. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. Under those very basic and working capital days meaning reasonable assumptions, my modeling suggests that by 2022, Norwegian’s earnings per share could rebound to $2.50, which is well within the range of Wall Street’s estimates. Based on a historically average 12-times forward earnings multiple, that implies a 2021 price target for NCLH stock of $30.

Why Cruise Line Stocks Surged Between 28% and 68% in June – The Motley Fool

Why Cruise Line Stocks Surged Between 28% and 68% in June.

Posted: Wed, 05 Jul 2023 07:00:00 GMT [source]

Investors in search of safe stocks may want to stay away from this industry right now. There are just four pure-play cruise line companies easily available to U.S. investors, but we look at them in our usual style. Because the entire industry has suffered losses in recent quarters, the value section below will be based on price-to-sales ratio rather than the usual price-to-earnings ratio (P/E Ratio).

Best Value Cruise Line Stocks

Additionally, even if the prognosis is favorable now, there is much uncertainty. Bookings grew every week consecutively throughout the period, surpassing those in the fourth quarter of 2021. Additionally, bookings were “substantially higher” throughout each period compared to the exact times in 2019, prior to COVID.

Reflecting this, occupancy rates have increased to 69% from the 54% reported in the last quarter. In this article, we will be looking at the 10 best cruise stocks to buy now. To skip our detailed analysis of the leisure travel industry and its future outlook, you can click to see the 5 Best Cruise Stocks to Buy Now. As an investor, I see the stock performance of the cruise lines this year less as a question of whether this is an opportune time to buy their shares and more as an affirmation of the ever-present need to diversify. These debt payments, combined with increased revenues, should enable the company to “approach investment grade” in its bond ratings in 2026, Mr. Bernstein said.

The average analyst rating on the stock is a “strong buy.” The average price target is $140.09, representing an upside potential of 48.56% from the current price as of writing. On one trip, three generations of my extended family were able to see the world together, while participating separately in age-appropriate recreation — on board, in the water and on land. So I’m personally pleased by the beginnings of a sea cruise renaissance, though not ready to sail again quite yet. But the virus spread relentlessly, and more than 700 people ultimately tested positive.

But they’ve also had to take on significant debt to get through the pandemic, and revenues aren’t predicted to get back to pre-COVID numbers until 2024. On average, 19 people go overboard on cruise ships every year — of those, about four people are successfully rescued, a 2020 study commissioned by the industry trade group Cruise Lines International Association found. The previous incidents occurred on the cruise ships Carnival Magic, Carnival Elation, Spectrum of the Seas, Emerald Princess, and Mariner of the Seas.

But factor in the pandemic and the subsequent economic recovery, and the cruise line stock and bond performance tracks nicely. At midyear, three of the big cruise companies — Carnival, Royal Caribbean Group and Norwegian Cruise Line Holdings — were among the top 10 stocks in the S&P 500. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Cruise ships are seeing more people come on board this summer as 31.5 million people are expected to cruise this year. This is at least the sixth person to go overboard a cruise ship in the past three months.

One of the hardest hit sectors by the coronavirus pandemic was the cruise ship industry. While other hospitality sectors, such as hotels and restaurants had time to prepare to deal with lockdown requirements aimed to curb the spread of the virus, cruise companies were simply caught off guard. This is due to the fact that as lockdowns started to be enforced, many cruise ships were in the middle of their journeys, and were often left stranded at sea due to port and harbor closures. In fact, a little known fact about the pandemic is that one of the most widespread coronavirus outbreaks after China in fact took place on a cruise ship. This ship was the Diamond Princess which has more than a thousand guest cabins and roughly the same number of crews. Even when cruise lines have built some momentum, news of potential travel restrictions caused by the delta and omicron variants have sent their stock prices tumbling.

Carnival cruises are popular among families and groups of friends alike, including younger generations. Carnival excels in customer satisfaction, winning the 2021 USA Today Readers’ Choice Awards for best ocean cruise line. Royal Caribbean (RCL -1.67%) is distinguished as being one of the most innovative cruise lines. Its ships are packed with state-of-the-art amenities, including virtual balconies, massive water slides, skydiving at sea, and even Broadway shows.

Stock Money Flow

That said, investors need to understand that, although ships are starting to sail again, the future of cruising is still uncertain. The fuel service industry also saw a significant drop in performance, reflected in the incredibly low price of gas. Some of the companies they service include cruises on our list, including Norwegian, Royal Caribbean, and Carnival cruises. Since Carnival is the largest player in the game, it may be the best long-term investment, especially since prices are low right now.

At the end of the first quarter, the business had put 54 of its ships back into service under its five brands, accounting for roughly 90% of its worldwide capacity. About 800,000 visitors traveled with the company’s brands in the first quarter, and that period also witnessed a record total revenue per passenger cruise day. This is a crucial revenue indicator that assesses a cruise line’s capacity to increase pricing for each passenger. The second-largest cruise ship company in the world, Royal Caribbean offers services on six continents. Before COVID, the corporation generated around $11 billion yearly revenue and now has a $14.8 billion market valuation. For 2023, current predictions place Royal Caribbean’s income higher than pre-COVID levels.

Based on an earnings power of $8.00 per share, we predict Royal Caribbean will increase its profits per share by 7% over the next five years. Royal Caribbean is exposed to the standard hazards cruise line operators face, such as fuel prices and currency sensitivity. All quarters for 2023 are currently reserved with volumes within historical ranges but at record prices. In addition to increasing sales and generating cash flow, this will also assist with margins. Based on these variables, Royal Caribbean anticipates operating financially in the second half of 2022. Despite this, market analysts concur that the long-term outlook is favorable.

An earlier version of this article misstated when the World Health Organization declared a coronavirus pandemic. Many top performers in the stock market for the first half of this year were exactly what you would expect, if you’ve been following the news.