Most cruise companies suffered heavy losses due to the COVID-19 pandemic-led restrictions. Although the industry made a strong recovery with the easing of travel restrictions and the reopening of the economy, cruise stocks Carnival Corporation & plc (CCL) and Norwegian Cruise Line Holdings Ltd. (NCLH) nosedived after a Morgan Stanley analyst outlined a worst-case scenario that CCL could sink to $0 in the event of a global economic downturn.
In a report, MS analyst Jamie Rollo said, “If there is a demand shock that causes trip cancellations or weak bookings, liquidity could quickly shrink.” According to Rollo, if CCL’s revenue and capacity increase from the 2019 levels, its new base-case target price is $7. Meanwhile, Citigroup has maintained its Neutral rating for NCLH but lowered its price target to $13 per share from $18.
