【22-250 zero at 200 yards】Morgan Stanley Deboards From Cruise Lines, Bearish On Carnival, Norwegian And Royal Caribbean
The22-250 zero at 200 yards shares of a number of cruise liners have been hit due to the coronavirus pandemic that's continuing to harm the travel industry. Morgan Stanley downgraded cruise liners Wednesday and said it expects cruises to resume in the fourth quarter.
The Cruise Lines Analyst
Jamie Rollo
reinstated coverage of
Carnival Corp
(NYSE:
CCL
) and
Royal Caribbean Cruises
(NYSE:
RCL
) with an Underweight rating and price targets of $11 and $33, respectively.
The analyst downgraded
Norwegian Cruise Line
(NASDAQ:
NCLH
) from Equal-weight to Underweight with a price target cut from $14 to $13.
The Cruise Lines Thesis
The cruise industry will take longer than almost any other form of travel to return to normal, Rollo said in a note. (See his track record
here
.)
“Cruising needs not just international travel to return, but ports to reopen, authorities to permit cruising, and the return of customer confidence,” the analyst said.
A number of things need to happen for the cruise industry to resume sailing, and there is a risk this might not occur until 2021, and possibly later, he said.
Morgan Stanley estimates that cruises will resume in the fourth quarter of 2020. Cruise lines have developed a comprehensive plan for resuming operations and sailing in a safe manner that takes into account the unique high-risk setting of cruise ships in the era of this coronavirus, Rollo said.
“It's a tall order to try to make a cruise ship environment safe for sailing in an era of this virus continuing to circulate on the globe."
The
Cruise Line Industry Association
is also currently looking at introducing new safety procedures, the analyst said.
CCL, RCL, NCLH
Price Action
Norwegian Cruise Line shares were trading 4.49% higher at $18.16 at the time of publication. The stock has a 52-week high of $59.78 and a 52-week low of $7.03.
Carnival Cruise shares were up 3.08% at $17.39. The stock has a 52-week high of $53.86 and a 52-week low of $7.80.
Royal Caribbean shares were trading up 3.36% at $57.85. The stock has a 52-week high of $135.32 and a 52-week low of $19.25.
Related Links:
Analyst: Here's How Long Carnival, Norwegian And Royal Caribbean Can Last Without Revenue
Here's How Long Carnival, Norwegian And Royal Caribbean Can Last Without Revenue
Latest Ratings for CCL
Jun 2020
Morgan Stanley
Reinstates
Underweight
May 2020
Credit Suisse
Initiates Coverage On
Neutral
May 2020
SunTrust Robinson Humphrey
Maintains
Hold
View More Analyst Ratings for CCL
View the Latest Analyst Ratings
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