Cruise stocks poised for surge as analyst sees ‘near-term’ return to cruising

Cruise stocks poised for surge as analyst sees ‘near-term’ return to cruising

Cruise stocks could be poised to break north after an analyst for Barclays said she believes the U.S. Centers for Disease Control and Prevention  (CDC) could signal “a near-term” resumption of cruise operations from North America.

The industry is currently in the docks due to the CDC’s No-Sail Order first imposed in mid-March due to the coronavirus pandemic and currently running through September 31.

Barclays analyst Felicia Hendrix said that she did not believe the CDC would lift the No-Sail order before the end of the month, but that she believed it would make positive comments on a resumption of operations when it did make an announcement.

“While chances are high (in our view) that the CDC extends the date again (likely into 4Q20), we believe the comments from the agency will be positive and could signal a near-term return to cruise,” updates analyst Felicia Hendrix.

Cruise stocks could be poised to break north
Cruise stocks could be poised to break north

Cruise stocks had reached an “inflection point”

Hendrix said she believed that after precipitous declines, cruise stocks had reached an “inflection point,” estimating that Carnival could surge by 126% to $31 per share, Norwegian Cruise Line Holdings by 78% to $26 per share and Royal Caribbean by 13% to $68 per share.

Earlier in September, Norwegian CEO Frank Del Rio warned that the cruise industry is “close to devastation” and needs to get back to work immediately to stay alive.

Noting that the market capitalization of the Big Three cruise lines had dropped by some $50 billion since the crisis erupted,  Del Rio said what has happened to the industry is “unconscionable.”

“We’ve been quiet for too long….I think it’s time to raise our voices,” he said. “ I think it’s time to let them know that we are confident of our protocols. We are confident that we can operate safely in this COVID-19 world.”

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