CCL

Carnival is one of the largest cruise operators with a fleet over 100 vessels. Its stocks are traded 65% off 2021 peak prices. The company suffered much from COVID-19 restriction when its ships had to be anchored while paying huge maintenance fees. The recent Q1 2022 financial report of the company may not be ideal, but it has demonstrated a steady gradual return to the prepandemic numbers.

Carnival has reported that 91% of its vessels’ capacities are booked for June, according to the financial Q2 2022 report. More reservations are being made for the months to come. Revenue soared by 50% year-on-year to $2.4 billion. However, Carnival finances are looking fragile as it became cash flow positive only with clients’ deposits that were made in reservations. The overall amount of such clients’ deposits topped $5.1 billion. In comparison, the amount of the deposits for Q1 2019 was at $5.8 billion.

Carnival is going to restore 100% of its capacity use in the near term, and the long-term perspectives are seen to be very promising. The number of reservations for the second half of 2022 outpaced 2019 comparable level. Short-term cruises are looking much more promising now, and the company may surprise investors if more vessels are made operational.

The return to the target price of $20 per share in the middle-term seems to be realistic.