Cruise Stock Capsizes Despite German Affiliate Setting Sail

The equity is up 23.3% in the last three months

Fernanda Horner
Jul 9, 2020 at 10:53 AM
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The shares of Carnival Corp (NYSE: CCL) are down 2.7% at $14.90 this morning, even after German affiliate AIDA Cruises said it would resume sailing operations in August, months after cruises were forced to stop voyages due to the COVID-19 pandemic. As it restarts operations, the cruise line said it introduced several measures that complement existing health and hygiene standards.

The equity has been chopping higher on the charts since drowning to an all-time-low of $7.80 on April 2. But even with support from the 80-day moving average throughout most of June, shares are struggling to break north of the $15 level. Longer term, CCL is down 70%, even if recent news have helped shares increase by 23.3% in the last three months.

Analysts were extremely cautious of CCL coming into today, with seven of the 12 in coverage carrying a tepid "hold" rating. Plus, the 12-month consensus target price of $16.86 is a 13.3% premium to current levels. Short sellers continue to pile on, too. In the last two reporting periods, short interest rose 3.8%, and the 122.36 million shares sold short represent a whopping 25.9% of the stock's available float.

What's more, the stock's Schaeffer's Volatility Scorecard (SVS) sits high at 88 out of 100, showing that the equity has tended to exceed option traders' volatility expectations during the past year, a good thing for option buyers.


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