Why Carnival Stock Is Up By 3% Today

Carnival Corporation Misses Analyst Estimates

Shares of Carnival gained upside momentum after the company released its quarterly results. Carnival reported revenue of $1.29 billion and a loss of $2.31 per share, missing analyst estimates on both earnings and revenue.

Interestingly, fears about the spread of Omicron did not put additional pressure on Carnival stock. In fact, news about 48 passengers who tested positive for Omicron on a Royal Caribbean ship were not sufficient enough to push cruise stocks into the negative territory.

Carnival Corp. stated that Omicron has already hurt near-term bookings. However, demand for cruises in late 2022 and 2023 remained healthy: “Cumulative advanced bookings for the second half of 2022 and first half of 2023 are at the higher end of historical ranges and at higher prices, with or without future cruise credits, normalized for bundled packages, as compared to 2019 sailings”.

The company noted that it finished the quarter with $9.4 billion of liquidity, which should provide enough support even if the situation with coronavirus gets worse.

What’s Next For Carnival Stock?

Analysts expect that Carnival will report a loss of $0.16 per share in 2022. Just three months ago, the company was expected to report a profit of $6.13 per share, which means that analyst estimates have been radically cut in recent months.

Not surprisingly, the stock followed analyst estimates and moved from the $31 level at the beginning of June to the $17 level at the start of this month before rebounding towards $19.

The near-term dynamics of the stock will depend on the spread of Omicron, which may deal a significant blow to cruise demand in the near term. While traders look optimistic today and the stock is moving higher despite Omicron fears, Carnival stock will likely find itself under material pressure if the number of daily coronavirus cases keeps moving higher in the upcoming weeks.

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