With Memorial Day weekend approaching, the summer season is set to kick off and in turn the cruise line season. One of the cruise line stocks that are well-positioned to become a major winner this summer season is Carnival Corporation & plc (NYSE: CCL). Over the past years, CCL stock has always made a summer run extending through June till August and this summer is no exception. Considering that the cruise line announced record bookings in Q1 in Europe and North America, this summer is shaping up to be exciting for CCL stock.
CCL Fundamentals
The summer season has always been CCL’s busiest season and the season in which CCL stock performs the best. Last year, CCL stock ran 32% from June to August, the same can be expected for its revenue as CCL’s revenues nearly doubled last year from $2.4 billion in Q2 to $4.3 billion in Q3. As CCL is starting to regain its pre-pandemic numbers and more countries start to fully open up, this summer season has the potential to be CCL’s best since the pandemic.
CCL is expecting a 4.5% increase in capacity growth this summer compared to pre-Covid in 2019. Furthermore, CCL is expanding Half Moon Cay, its private island, which has been consistently voted as the best private island, and is also developing its largest Caribbean destination yet Grand Bahama Port. All of this indicates that CCL is expecting a busier summer than usual and these actions could help CCL have an extremely successful summer season.
Earlier this year, CCL announced in its Q1 2023 earnings call that it has achieved record booking in both Europe and North America, which means that demand for cruise lines is coming back and the summer season may return record-high numbers too. In turn, customer deposits in Q1 also reached an all-time high for the quarter. That is also partially because CCL has raised its prices, but its customers do not seem bothered by it, which would mark great news for CCL.
At the same time, operations are expected to resume in Asia as cruises will start in Japan and Singapore this summer which are huge markets for CCL. As this resumption of operation is coming just in time for the summer season, CCL could be poised to report its best revenues since the pandemic this summer.
However, the only thing CCL is missing at the moment is the Chinese market as China is yet to resume its international cruise trips. China is one of CCL’s biggest markets with more than 1 million customers a year pre-pause and it will probably miss the crucial summer season. With this in mind, China is expected to fully open in the second half of 2023 which would massively boost CCL’s revenues in the latter half of the year since the Chinese market is one of the largest in the world. Meanwhile, CCL is still trying to make the best out of a bad situation as it started planning alternate deployment for its Costa fleet.
With that said, the biggest obstacle CCL will be facing is the $35 billion debt it accumulated during the pandemic. The good news is that CCL reported positive cash flow in Q1 2023 and is expecting to achieve positive cash flow for the whole year. CCL also beat its net loss estimates of $750 million – $850 million by $57 million recording $693 in net losses which shows that CCL is moving in the right direction to return to its pre-pandemic glory. In light of this, CCL stock could be a profitable buy this month ahead of the summer season.
CCL Financials
In its Q1 2023 report, CCL’s assets slightly decreased by 5% from $7.492 billion to $7.114 billion, and its cash and cash equivalents increased 36% YoY from $4.029 billion to $5.455 billion. CCL’s current liabilities saw a slight increase of 3% YoY from $10.6 billion to $11 billion.
Revenue also increased 229% YoY from $0.87 billion to $2.87 billion. Operating costs increased 48% from $3.11 billion to $4.6 billion, which contributed to its operating loss declining by almost 89% YoY from $1.49 billion to $0.172 billion, which amounted to a net loss of $693 million – a 63% improvement YoY.
Technical Analysis
CCL Stock is in a bullish trend with the stock trading in an upward channel. Looking at the indicators, CCL is trading above the 200 MA, however, the stock is below the 50 and 21 MAs. The RSI is neutral at 41, while the MACD is approaching a bullish crossover.
As for the fundamentals, CCL is approaching a seasonal catalyst in the cruise line season which will start this summer. With the stock trading near the lower trendline, bullish investors could enter long positions on retests of the lower trendline ahead of the summer season to capitalize on CCL’s seasonal run.
CCL Forecast
CCL has shown many signs of improvement as it is recovering from the pause in operation due to the pandemic. While it still did not settle its debt situation, CCL is expected to achieve positive cash flow for the year and is close to achieving positive operating income. Furthermore, CCL achieved record booking in Q1 in both Europe and North America with the summer its busiest season approaching. For these reasons, CCL stock could be a profitable buy ahead of the summer season.
CCL Fundamentals
The summer season has always been CCL’s busiest season and the season in which CCL stock performs the best. Last year, CCL stock ran 32% from June to August, the same can be expected for its revenue as CCL’s revenues nearly doubled last year from $2.4 billion in Q2 to $4.3 billion in Q3. As CCL is starting to regain its pre-pandemic numbers and more countries start to fully open up, this summer season has the potential to be CCL’s best since the pandemic.
CCL is expecting a 4.5% increase in capacity growth this summer compared to pre-Covid in 2019. Furthermore, CCL is expanding Half Moon Cay, its private island, which has been consistently voted as the best private island, and is also developing its largest Caribbean destination yet Grand Bahama Port. All of this indicates that CCL is expecting a busier summer than usual and these actions could help CCL have an extremely successful summer season.
Earlier this year, CCL announced in its Q1 2023 earnings call that it has achieved record booking in both Europe and North America, which means that demand for cruise lines is coming back and the summer season may return record-high numbers too. In turn, customer deposits in Q1 also reached an all-time high for the quarter. That is also partially because CCL has raised its prices, but its customers do not seem bothered by it, which would mark great news for CCL.
At the same time, operations are expected to resume in Asia as cruises will start in Japan and Singapore this summer which are huge markets for CCL. As this resumption of operation is coming just in time for the summer season, CCL could be poised to report its best revenues since the pandemic this summer.
However, the only thing CCL is missing at the moment is the Chinese market as China is yet to resume its international cruise trips. China is one of CCL’s biggest markets with more than 1 million customers a year pre-pause and it will probably miss the crucial summer season. With this in mind, China is expected to fully open in the second half of 2023 which would massively boost CCL’s revenues in the latter half of the year since the Chinese market is one of the largest in the world. Meanwhile, CCL is still trying to make the best out of a bad situation as it started planning alternate deployment for its Costa fleet.
With that said, the biggest obstacle CCL will be facing is the $35 billion debt it accumulated during the pandemic. The good news is that CCL reported positive cash flow in Q1 2023 and is expecting to achieve positive cash flow for the whole year. CCL also beat its net loss estimates of $750 million – $850 million by $57 million recording $693 in net losses which shows that CCL is moving in the right direction to return to its pre-pandemic glory. In light of this, CCL stock could be a profitable buy this month ahead of the summer season.
CCL Financials
In its Q1 2023 report, CCL’s assets slightly decreased by 5% from $7.492 billion to $7.114 billion, and its cash and cash equivalents increased 36% YoY from $4.029 billion to $5.455 billion. CCL’s current liabilities saw a slight increase of 3% YoY from $10.6 billion to $11 billion.
Revenue also increased 229% YoY from $0.87 billion to $2.87 billion. Operating costs increased 48% from $3.11 billion to $4.6 billion, which contributed to its operating loss declining by almost 89% YoY from $1.49 billion to $0.172 billion, which amounted to a net loss of $693 million – a 63% improvement YoY.
Technical Analysis
CCL Stock is in a bullish trend with the stock trading in an upward channel. Looking at the indicators, CCL is trading above the 200 MA, however, the stock is below the 50 and 21 MAs. The RSI is neutral at 41, while the MACD is approaching a bullish crossover.
As for the fundamentals, CCL is approaching a seasonal catalyst in the cruise line season which will start this summer. With the stock trading near the lower trendline, bullish investors could enter long positions on retests of the lower trendline ahead of the summer season to capitalize on CCL’s seasonal run.
CCL Forecast
CCL has shown many signs of improvement as it is recovering from the pause in operation due to the pandemic. While it still did not settle its debt situation, CCL is expected to achieve positive cash flow for the year and is close to achieving positive operating income. Furthermore, CCL achieved record booking in Q1 in both Europe and North America with the summer its busiest season approaching. For these reasons, CCL stock could be a profitable buy ahead of the summer season.