Leisure travel company Carnival (NYSE:CUK) Corporation (CCL) has attracted investors’ interest over the past few months with its announcement that it plans to resume some of its guest cruise operations. However, its stock price has retreated 1.6% over the past month to close Friday’s trading session at $28.13. Given the company’s bleak recovery prospects in the near term and the stock’s lofty valuation, is it wise to bet on the stock now? Let’s discuss. Read on.Shares of the world’s largest cruise company, Carnival Corporation & plc (CCL)—which has a fleet of 87 ships that visit more than 700 ports around the world—have advanced 8.8% over the past three months to close Friday’s trading session at $28.13. This is due primarily to investors’ optimism surrounding the company’s plans to resume its guest cruise operations in a phased manner in the United States, the Caribbean and Europe. However, it’s expected to take a long time before the company can operate at full capacity.
Miami-based CCL said it expects to have its full fleet back in operation by spring 2022. It added that its phased resumption of guest cruise operations is expected to continue to have a material impact on all aspects of its business, including liquidity, financial position and operational results. However, it is expected it will take time for CCL to pay off massive debts accumulated amid the COVID-19 pandemic. So, we think its near-term prospects look bleak.
Furthermore, on June 18 CCL said it had detected unauthorized access to its computer systems in March, affecting the personal information of some guests, employees and crew for Carnival Cruise Line, Holland America Line, Princess Cruises and medical operations. So, here are the factors that I think could shape CCL’s performance in the coming months: