Why Is Carnival Cruise Stock Down?

Carnival, the cruise operator, experienced a quarterly loss and forecasted higher-than-expected costs for the year, leading to a 60% drop in its stock over the past five years. The pandemic had significantly impacted the industry, forcing cruise operators to take on massive amounts of debt to survive. Carnival’s stock is currently 60% below its pre-pandemic high, and shares have fallen below their pandemic lows.

Carnival’s enterprise value could technically go up, but it has more debt than it once did and makes far less money. The cruise giant is breaking out past a new buy point following Tuesday’s advance, and shares are in buy range. BI Asset Management Fondsmaeglerselskab A S reduced its position in Carnival by 85.3% during the first quarter.

Carnival and Norwegian are each down about 7%, while the SP 500 is up over 12% over the same period. Royal Caribbean is in the green for the time being. The cruise industry has been drydocked longer than any other due to COVID-19, forcing cruise ship stocks to take on massive amounts of debt to survive. Carnival’s stock is currently 80% below its peak price, despite shares soaring 76% since the start of 2023.