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Analysis of Carnival Corporation (#CCL)

Analysis of Carnival Corporation (#CCL)

7 April 2021

Carnival Corporation is a multinational cruise company, one of the world’s largest cruise travel companies. It has 20 subsidiaries of cruise companies that operate on behalf of the company in different countries. As of November 2019, Carnival Corporation owned more than one hundred cruise ships with a total capacity of 225,000 people. The annual flow of transported tourists was 11.5 million people. However, in 2020, due to the consequences of the coronavirus pandemic, Carnival Corp., lost billions of dollars and said that it plans to sell 18 liners from its fleet.

# CCL’s main competitors are also major cruise companies such as Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holding.

Revenue for 2020: $5.6 B (-73% y-o-y)

Operating loss for 2020: $6.7 B

Net loss for 2020: $10.2 B

Earnings per share for the latest quarter: -$2.02, lower than forecast -$1.94

The tourism sector suffered the most from the 2020 crisis, and # CCL was no exception.

Geographical distribution of revenue:

North America – 55.13%

Europe – 29.37%

Australia and Asia – 12.28%

Other – 3.22%

The company has suffered from the current crisis much more than others. In March 2020, the company’s quotes fell by 70% from pre-crisis values. However, now that the economy is recovering and the US is adopting solid stimulus packages, demand for the company’s shares has increased significantly, as has its price.

Thus, # CCL is a mature company that provides services that are a luxury and the demand for which can be significantly volatile depending on the economic cycle. The company’s current multipliers are already too high and buying Carnival Corporation shares at that price is too risky.

7 April 2021
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