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Investing.com -- Carnival Corporation (NYSE:CCL) stock sank 7% Monday, leading a broader decline in cruise line shares as industry executives expressed caution about near-term challenges. Royal Caribbean Cruises (NYSE:RCL) fell 3.3% while Norwegian Cruise Line (NYSE:NCLH) dropped 2.5%.
The selloff followed comments from Carnival management during a ship visit to the company’s AIDAdiva vessel. According to Barclays analyst Brandt Montour, executives conveyed an "incrementally cautious" tone regarding investor concerns about the U.S. macroeconomic environment and elevated Caribbean capacity growth.
Montour noted that management acknowledged the recent increase in Caribbean capacity represents "some degree of headwind" for the industry. However, he added that these comments weren’t "necessarily out of line with commentary from RCL last week on our group call or RCL’s recent earnings update."
Despite the cautious outlook, Barclays maintains an overweight rating on Carnival shares. Montour highlighted that Carnival’s "broader diversification, stemming from ~36% locally sourced Europeans, coupled with ongoing turnarounds at several brands, should collectively blunt any downside risk in the N.A. Caribbean market."
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