CCL's stock price

[cr8tiv1]

On 9/26/2023 at 5:20 PM, JeffElizabeth said:

Wow! I bought at $40. Ouch. 

Seemed like pretty good earnings I saw this week, but can they keep it up? 

 

Me too...(not quite as high as $40).  But I did buy an additional 100 for single digits.  I have cruised enough to recover most, if not all, of my investments.  

[BlerkOne]

3 hours ago, Ombud said:

I was not aware that other Carnival Corp lines didn't have all inclusive pkgs. Seems like they should but I haven't cruised Carnival for 7 

Other Carnival brands have drink packages, but they are not new. I'm not aware of other Carnival brands with bundles or recent controversy?

[BlerkOne]

9 hours ago, Steelers36 said:

Oh, and the higher fuel costs bit them, but they expect sunnier days on those costs going forward.

Oil prices come and go but seem to be trending up, but you know what isn't? LNG. Which is what the newest Carnival ships primarily use. They are going in opposite directions.

[SCX22]

Speaking of the U.S. and in general terms....

In the grand scheme of things, investors are holding out on the travel and leisure industry.  Investors are still waiting for the effects of the Fed's steep interest rate hikes.  If the world was right side up, recession would be in full swing by now.  Q3 2023, however, GDP grew after two consecutive quarters of decline.  One problem is employment and wages are still high.  Consumption is slowing but it's due to inflation, not because of unemployment.  Investors are wondering if the economy will have a hard landing or a soft landing.  If there is a hard landing, consumers will forgo travel and leisure and the industries involved will feel the pinch.  The future is still uncertain.

 

Why does the U.S. matter so much to cruising?  North America is the largest source market for cruising, according to CLIA.  It's market share is double of that of Western Europe which is the second largest.

Edited September 30, 2023 by SCX22

[Steelers36]

20 hours ago, LACruiser88 said:

 

Here is one online assessment from today's report:

 

 

Sep 29, 2023

Carnival Corp. shares closed down 5% Friday at $13.72 after the company gave a mixed picture for 2024.

 

Scoring its first quarterly profit since the pandemic, Carnival blew past profit expectations and chalked up record revenues. Though the company raised its outlook, it forecast a wider Q4 loss than the Wall Street consensus and didn't issue 2024 guidance.

During the earnings call, analysts questioned consumer health and pressed for more 2024 details.

 

No signs of a slowdown

CEO Josh Weinstein repeatedly said Carnival sees no signs of a weakened consumer nor any slowdown in bookings or spending.

 

The company approaches 2024 with a 'strong base of business' positioning it for further revenue improvement. The booking curve has lengthened, occupancy is ahead of last year by 10 points on higher pricing and 'well ahead' of 2019 despite 2024's 5% capacity increase. Carnival expects to return to occupancy in the 106% to 107% range next year.

'We just haven't seen [any slowdown] in our bookings or our results,' Weinstein said.

 

European brands doing better

Where there was concern around Europe before, the CEO said Carnival's European brands should be applauded and congratulated for their turn around, with Costa Cruises and AIDA Cruises hitting positive yields over the summer. And though P&O Cruises, with a 40% capacity spike this year, may not have raised yields, it recovered occupancy.

 

Further gains for the European brands — which made up 38% of Carnival's capacity in 2023 — is expected. 'We're quite encouraged they'll be making up big chunks of revenue yield performance,' Weinstein said

.

The Carnival Cruise Line brand continues to outperform and adds capacity in 2024, while the Australia business is recovering.

 

Headwinds

On the minus side for 2024: The high-yielding Baltic itineraries that included St. Petersburg are still gone due to the war in Ukraine. China remains a question mark for the industry, though Carnival remains largely on the sidelines there.

 

Inflation is decelerating but 'we'll have to see how that plays out,' Weinstein said.

Expenses will be higher with 530 drydock days in 2024 adding three-quarters of a point to a point of cost.

 

Costs also go up with four new ships coming online. Before, new ships used to be 15% to 20% more efficient, but CFO David Bernstein noted that since Carnival's fleet optimization, with older vessels exiting during the pandemic, efficiency gains from new ships will probably be less than 1%.

 

EU emissions tax

With the European Union's new carbon emissions tax coming into play, Carnival expects to pay approximately $75m for the full year. This is expected to represent 40% of what the total will be at some point in the future as the taxes are progressive, Bernstein said. But since the tax is based on fuel consumption, mitigation efforts will help chip away at that.

 

Back to investment grade metrics in 2026?

By 2026, a combination of improving EBITDA and Carnival's debt reduction program should bring the company back to investment grade metrics, Bernstein said. With four newbuilds coming in 2024, there's less opportunity to narrow the debt. But in 2025, Carnival will take delivery of just one new ship, and no deliveries are planned for 2026.

One of the things I missed in yesterday post, was the general malaise and down market.  Not likely a stock like CCL is going to buck a general market trend even if news was "okay".  In an up-market day, CCL may not have sustained such a big hit as Friday's slap-down was.

[BlerkOne]

43 minutes ago, Steelers36 said:

One of the things I missed in yesterday post, was the general malaise and down market.  Not likely a stock like CCL is going to buck a general market trend even if news was "okay".  In an up-market day, CCL may not have sustained such a big hit as Friday's slap-down was.

A government shutdown won't cause a rally.

[JeffElizabeth]

The higher interest rates are killing much of my portfolio.  And it has to worry companies with a lot of debt on their books like cruise lines when it comes time to refinance those loans. 

[JeffElizabeth]

1 hour ago, BlerkOne said:

A government shutdown won't cause a rally.

Although if you are a non-essential government employee who thinks the shutdown will take about three weeks, book a last minute cruise and then come home and get your backpay.  Risky but it could work out. 

[BlerkOne]

25 minutes ago, JeffElizabeth said:

The higher interest rates are killing much of my portfolio.  And it has to worry companies with a lot of debt on their books like cruise lines when it comes time to refinance those loans. 

Carnival has been refinancing to lower interest rates for some time without a problem and still has a significant line of credit not currently being used.

[windsor26]

On 9/30/2023 at 11:48 AM, Ombud said:

 

Only those cruises that commence from Australia  otherwise  on board spending in US$ and tips etc as usual

[PrincessLuver]

On 9/30/2023 at 2:41 PM, BlerkOne said:

Carnival has been refinancing to lower interest rates for some time without a problem and still has a significant line of credit not currently being used.

 

As interest rates go higher investors are moving their money away from stocks and using other financial instruments where they can to make more money with the higher rates.  Inflation is taking its' toll too.

Then who knows what is going to happen now to the economy with the upheaval and dysfunction in DC?

Stocks may be headed for the doldrums for a long time. 

[BlerkOne]

2 hours ago, PrincessLuver said:

 

Stocks may be headed for the doldrums for a long time. 

or they may not. Might as well throw darts.

[PrincessLuver]

44 minutes ago, BlerkOne said:

or they may not. Might as well throw darts.

Check back in. year and CCL will still be where it is today.  Debt load is just too large and rising costs are going to hinder CCL.  Not to even mention the possibility of w world wide recession.  That is a big dart coming right at the cruise industry.

[MissP22]

12 minutes ago, PrincessLuver said:

Check back in. year and CCL will still be where it is today.  Debt load is just too large and rising costs are going to hinder CCL.  Not to even mention the possibility of w world wide recession.  That is a big dart coming right at the cruise industry.

We still have our 100 shares of CCL but with all the uncertainty in the travel industry lately, I wouldn't be betting any great amount for capital gains in their stock. 

[c-boy]

On 9/30/2023 at 2:41 PM, BlerkOne said:

Carnival has been refinancing to lower interest rates for some time without a problem and still has a significant line of credit not currently being used.

this stock is in our investment portfolio under the heading "Novelty stocks" .  We're not looking for a return any time soon, hell I might be six feet under before there is one . 

[SCX22]

At this specific point in time, the CCL shares owned by cruisers who cruise and use the OBC perk are a liability to CCL.

[Ken the cruiser]

3 minutes ago, SCX22 said:

At this specific point in time, the CCL shares owned by cruisers who cruise and use the OBC perk are a liability to CCL.

Really? We just spent $15K for a cruise so we could get the $100 OBC perk. I don't think anyone at CCL is calling us a liability. 🤣

[SCX22]

7 minutes ago, Ken the cruiser said:

Really? We just spent $15K for a cruise so we could get the $100 OBC perk. I don't think anyone at CCL is calling us a liability. 🤣

 

In money and investing, you have to look at the big picture.  When an average investor invests the return is small, but when Buffet and Soros invest, the returns are large because of the volume that they invest.

 

In the shareholder OBC, in your case it's only $100.  But on a larger scale it's a lot of money.  For every 1,000 shareholders that request for their shareholder's OBC, that's $100,000 that CCL has to giveaway, even more if the OBC is greater.  That $100,000 is probably the salary of 2 or 3 crew contracts.

[Ken the cruiser]

17 minutes ago, SCX22 said:

 

In money and investing, you have to look at the big picture.  When an average investor invests the return is small, but when Buffet and Soros invest, the returns are large because of the volume that they invest.

 

In the shareholder OBC, in your case it's only $100.  But on a larger scale it's a lot of money.  For every 1,000 shareholders that request for their shareholder's OBC, that's $100,000 that CCL has to giveaway, even more if the OBC is greater.  That $100,000 is probably the salary of 2 or 3 crew contracts.

But at the same time if those 1,000 shareholders spend on average $8,000 for a cruise, then that equates to $8,000,000. But more importantly, the $100 in OBC is also nonrefundable and must be used to purchase PCL products, which of course (except for gratuities) have been largely inflated, further reducing the impact of the SOBC. In fact, in some ways it creates an air of motivation for guests to spend more money purchasing onboard PCL products. In our case we prepurchase excursions which definitely sucks up the SOBC quite quickly.

 

OTOH imagine how many clients would move to other cruise lines if PCL either reduced or eliminated their shareholder benefits altogether. 🤔

Edited October 5, 2023 by Ken the cruiser

[SCX22]

27 minutes ago, Ken the cruiser said:

But at the same time if those 1,000 shareholders spend on average $8,000 for a cruise, then that equates to $8,000,000. But more importantly, the $100 in OBC is also nonrefundable and must be used to purchase PCL products, which of course (except for gratuities) have been largely inflated, further reducing the impact of the SOBC. In fact, in some ways it creates an air of motivation for guests to spend more money purchasing onboard PCL products. In our case we prepurchase excursions which definitely sucks up the SOBC quite quickly.

 

OTOH imagine how many clients would move to other cruise lines if PCL either reduced or eliminated their shareholder benefits altogether. 🤔

 

 

There's an ulterior motive that cruisers have in owning CCL stock.  Many own shares for dividends, but in CCL's case it's for the OBC perk.  Cruise lines are the only travel stock issuers that have a perk associated with ownership.  You could own airline shares and get no perks in return.  The confidence in the stock and company is skewed when there's an ulterior motive involved.  Your point to shifting lines with the elimination of this perk goes towards my point.

 

The sentiment involved at least on the CC forum is that the stock has "paid" for itself with the OBC that has been given, but has it been beneficial for CCL?  Probably not, at least not in the present interval of time.  At this moment in time, CCL need every penny they can scramble and giving money away, even in the form of OBC isn't really benefitting them.  I will concede that RC Group is the only cruise conglomerate that is in the position to reward shareholders.

 

Heck, if removing the OBC perk for shareholders would mean that Princess would reinstate some of the lost amenities available to all and/or higher tiers of the Captain's Circle program, I'd be all for it.

 

[Guest ldtr]

4 minutes ago, SCX22 said:

 

In money and investing, you have to look at the big picture.  When an average investor invests the return is small, but when Buffet and Soros invest, the returns are large because of the volume that they invest.

 

In the shareholder OBC, in your case it's only $100.  But on a larger scale it's a lot of money.  For every 1,000 shareholders that request for their shareholder's OBC, that's $100,000 that CCL has to giveaway, even more if the OBC is greater.  That $100,000 is probably the salary of 2 or 3 crew contracts.

Compared to other marketing program  expenses that Princess funds it is a pretty small amount. the obc benefit is exactly that a marketing program that covers all of the CCL lines. 

 

It is one of the lowest cost marketing programs since unlike others it is 100% effective. The dollars only get spent when a cruise is paid for and taken. Even better it is OBC so real cost is even lower.

Edited October 5, 2023 by ldtr

[Ken the cruiser]

11 minutes ago, SCX22 said:

There's an ulterior motive that cruisers have in owning CCL stock.  Many own shares for dividends, but in CCL's case it's for the OBC perk.  Cruise lines are the only travel stock issuers that have a perk associated with ownership.  You could own airline shares and get no perks in return.  The confidence in the stock and company is skewed when there's an ulterior motive involved.  Your point to shifting lines with the elimination of this perk goes towards my point.

 

The sentiment involved at least on the CC forum is that the stock has "paid" for itself with the OBC that has been given, but has it been beneficial for CCL?  Probably not, at least not in the present interval of time.  At this moment in time, CCL need every penny they can scramble and giving money away, even in the form of OBC isn't really benefitting them.  I will concede that RC Group is the only cruise conglomerate that is in the position to reward shareholders.

 

Heck, if removing the OBC perk for shareholders would mean that Princess would reinstate some of the lost amenities available to all and/or higher tiers of the Captain's Circle program, I'd be all for it.

 

They just did in a sense this past June when they changed the rules when both guests in a stateroom are military veterans, in that they can no longer also collect shareholder benefit OBC if they are both receiving the Military OBC. But that's cool, especially when they grandfathered the change to those that already had both added to their bookings prior to June 29.

[BlerkOne]

4 hours ago, PrincessLuver said:

Check back in. year and CCL will still be where it is today.  Debt load is just too large and rising costs are going to hinder CCL.  Not to even mention the possibility of w world wide recession.  That is a big dart coming right at the cruise industry.

The world may end before then.

[Ombud]

34 minutes ago, BlerkOne said:

5 hours ago, PrincessLuver said:

Check back in. year and CCL will still be where it is today.  Debt load is just too large and rising costs are going to hinder CCL.  Not to even mention the possibility of w world wide recession.  That is a big dart coming right at the cruise industry.

The world may end before then.

I'm a glass 1/2 full person. Correction (aka recession) will be short lived, the world won't end, and I'll see some of you onboard!!

[LACruiser88]

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