Carnival Corp stock. (CCL) fell more than 10% on Monday, making it the biggest laggard in the S&P 500 despite an earnings overshoot and better-than-expected outlook for 2023.
Citi leisure and travel analyst James Hardiman told Yahoo Finance Live he thinks Monday’s negative stock reaction could stem from Carnival’s strong start to the year.
“[Carnival] is to some extent a victim of [its] own success,” the analyst said. “When I’ve spoken to investors over the past week or two, I’ve really felt like expectations have gotten ahead of themselves. . We were hearing some pretty unreasonable numbers in terms of profitability for the current quarter, but at the end of the day, if you had shown me those results three months ago, I think everyone would be doing some backflip.”
The cruise liner posted a loss of $0.31 in the second fiscal quarter – lower than the $0.34 loss expected by analysts polled by Bloomberg. Revenue, meanwhile, hit a record high of $4.91 billion, beating estimates of $4.77 billion.
Carnival guided adjusted EBITDA between $4.10 billion and $4.25 billion for the full year 2023, “above the March guidance range and with a median increase of $175 million. dollar”.
Carnival shares have been in freefall this year, climbing more than 50% in the past three months and more than nearly 100% year-to-date before Monday’s release.
Shares of rivals Norwegian (NCLH) and Royal Caribbean (RCL) followed Carnival’s declines, falling about 6% and 3% respectively.
Carnival said it continued to see strong demand “with reservations and customer deposits hitting all-time highs,” CEO Josh Weinstein said in the earnings release.
On the earnings call, Weinstein said booking volumes were 17% higher than 2019, adding that the 2024 book position is also at “record highs.”
Still, as Hardiman pointed out, Wall Street had already turned bullish ahead of Carnival’s print, with several Wall Street analysts updating the headline in recent weeks.
Bank of America analyst Andrew Didora said “the cruise recovery is now stable” in a note published June 12, writing, “In our view, the cruise industry’s long booking window and the strong current demand could allow it to be less sensitive to a slowdown”. among the leisure consumer compared to other areas of travel. »
Josh Schaefer is a reporter for Yahoo Finance. Follow him on Twitter @_JoshSchafer
Alexandra Channel is a senior reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com
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