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Friday, November 27, 2020

Can Carnival Stock Aim For Big Rebound Post-Pandemic?

According to Forbes, Carnival CCL, one of the royal cruise ships had faced a big blow due to the coronavirus pandemic. However, it could be estimated that the pandemic could also mean that there can be possible recoveries that the ship experiences. This depends on how well the Carnival stock handles the upcoming challenges. 

If they can see to it, then there are chances of having more demands in the upcoming year. Due to the W.H.O guidelines, social distancing became a big protocol. This led to the business’ downfall. The stock market of the Carnival CCL had fallen by 70 percent during this time where the stock trades were about 15 dollars. For more than seven months, there was no customer for the line of the cruiser. During the 2008 recession, a similar incident was visible. However, Carnival stock performance when sold 44 dollars per stock, had gone up by 65 percent until the coronavirus pandemic. 

Carnival Stock: Can It Revive Like 2008?

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During the 2008 crisis, Carnival stock had been decreased by 49 dollars per stock to a meager amount of 20 dollars per stock during that year in October. This meant that 60 percent of the value of the Carnival stock was reduced by 60 percent. However, Carnival CCL recovered hugely by a quintessential number of 32dollars per stock being sold from 20 dollars. 

This meant that the Carnival stocks bounced back by 48 percent. Even though they recovered with good stock figures, in the pandemic the same crisis had hit Carnival CCL. One of the biggest crisis points would be that Carnival CCL cruisers had a debt of 9.5 billion dollars from the fiscal year of 2016. This further raised itself to 25 billion by the end of the year 2017. Recently in 2019, it has been increased by 5.1 billion dollars to 5.5 billion dollars. 

Even though it might look like that Carnival CCL has a good amount of cash cushion, it would not suffice them during the pandemic. Things would turn out grim for the proprietors of the company if the ship does not start sailing by 2021. With liquifying money from stocks and trying to pay the debt, the Carnival CCL would have bad finance.

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Even though after the 2008 crisis Carnival stocks had revived pretty easily, this is difficult after the coronavirus pandemic. This is because even though the cruise ship puts effort into the business, it would not be able to boost itself into selling 40 dollars per stock. The revival rate during the 2008 crisis was 40 dollars per stock. There is a difficulty in profiting in the scenario of the covid pandemic due to the pre-existing debt in the picture. 

One can presume this looking at the extreme cash burn and national economic conditions due to the pandemic. However, if companies buy Carnival stocks due to their strong revenue and history of profits, one might think of reviving the Carnival stocks. Therefore, one can only hope that such a miracle takes place.

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