TLCOhio Posted April 24, 2020 #1 Share Posted April 24, 2020 For many of us waiting weeks and weeks for refunds from cancelled cruises, we have watched and worried about the longer-term financial health/stability of the three major cruise lines. These cruise lines are heavy with debt and major future capital/operating obligations. From the respected Barron's business publication associated with the Wall Street Journal, they had yesterday this interesting headline: “Royal Caribbean Is the Best in Class and Its Stock Is a Buy, Say Analysts” with these story highlights: “Royal Caribbean Cruises is in the best position among its peers to 'navigate through this unprecedented operating environment,' concludes Stifel research. The coronavirus pandemic has hit the cruise operators as hard, if not harder, than just about any industry save for hotels, restaurants, and airlines. The Centers for Disease Control and Prevention earlier this month extended its No Sail Order , possibly into mid-July. Meanwhile, Royal Caribbean and the other two large publicly traded U.S. cruise companies— Carnival and Norwegian Cruise Line—are burning through millions of dollars of cash as their ships sit idle.” This report yesterday helped push up the value of the RCL stock from about $34 to $37. Since Jan. 17, 2020, RCL stock has gone down $135 a share to as low as $22 a month ago, Among the other key Barron's story highlights: "The Stifel analysts rate Royal Caribbean stock at Buy. They maintain that the company is in the best shape in terms of liquidity, with the ability to keep things going for about 10 months. Bloomberg reported that Royal Caribbean is looking to raise more capital. A Wells Fargo research report Thursday notes that any additional capital raise would likely be limited secured bonds or convertible bonds. 'We continue to view RCL as best in class and needing the least amount of capital, within an industry that admittedly will likely see an elongated recovery to pre-Covid-19 levels,' according to Timothy Conder of Wells Fargo. The Stifel analysts maintain that Royal Caribbean is best positioned when cruising does resume, partly owing to its 'brand quality.' The company’s Silversea brand, which caters to ultraluxury customers who tend to skew older, may have a challenging time initially, they observe. But that brand accounts for less than 2% of Royal Caribbean’s capacity, they note." This info is somewhat encouraging for those debating whether to take future cruise credits (FCC) or grab the promise of cash being returned in one to two months. But, if planning 2021 cruises, how much do you pay down now and how well do you have your risks covered from a worst-case financial situation affecting the cruise lines? There are two large variables/questions: How long does the shut-down take before resuming service? AND, how quickly will the cruise customers (many older and more vulnerable to health risks) re-gain confidence and be willing to travel on tightly-pack airlines and cruise ships filled with a diverse, international groups of passengers and staff? Am I missing anything major or being unfair with this background and questions? Full story at: https://www.barrons.com/articles/royal-caribbean-is-the-best-in-class-and-its-stock-is-a-buy-51587653461?adobe_mc=MCMID%3D20035585715925339982782966094942319618|MCORGID%3DCB68E4BA55144CAA0A4C98A5%40AdobeOrg|TS%3D1587658128 THANKS! Enjoy! Terry in Ohio AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 49,228 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta. www.boards.cruisecritic.com/showthread.php?t=2310337 1 Link to comment Share on other sites More sharing options...
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