Rising COVID-19 cases continue to hurt Carnival Corporation’s cruise lines, including Holland America Line and Princess Cruises, with both announcing additional cancellations due to pandemic-led uncertainties.
Carnival Corporation’s (CCL) Princess Cruises line announced that it is extending the pause on cruise sailings through May 14, 2021, as it continues to prepare its plans to meet the requirements of the U.S. Centers for Disease Control and Prevention (CDC). The development is also tied to the uncertainty associated with travel restrictions.
The cruise line’s decision includes sailings in the Caribbean and the California Coast as well as early season Alaska and Europe cruises. Princess Cruises had earlier cancelled all departures on all ships until March 31, 2021.
Furthermore, the company’s Holland America Line extended its pause of cruise operations until April 30, 2021. The cruise line also stated that it will cancel “all Alaska cruises through mid-May, Alaska departures on three ships through early June, any Land+Sea Journeys connected with canceled Alaska sailings, Mediterranean cruises through early June and Zaandam’s Canada/New England itineraries through August.” (See CCL stock analysis on TipRanks)
Also, Carnival Cruise Line announced additional cruise cancellations and prolonged the pause in its US operations through March 31, 2021.
Christine Duffy, President of Carnival Cruise Line, stated, “We are sorry to disappoint our guests, as we can see from our booking activity that there is clearly a pent-up demand for cruising on Carnival. We appreciate their patience and support as we continue to work on our plans to resume operations in 2021 with a gradual, phased in approach.”
Last month, Merrill Lynch analyst Andrew Didora raised the price target on Carnival Corporation to $22 from $15 on positive developments related to COVID-19 vaccines. However, the analyst maintained a Hold rating given the long path to recovery in the business and the need to raise additional capital.
The rest of the Street is also sidelined on the stock, with the Hold analyst consensus based on 2 Buys, 6 Holds and 1 Sell. Shares have tanked about 58% over the past year and the average price target of $20 indicates a possible downside of about 2% from current levels.
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