CCL's stock price

[wowzz]

1 minute ago, Jeal said:

Soooo - is this a good time to buy 100 shares of CCL stock?

Only if you are planning on cruising on CCL for at least 28 days a year for for the next three years or so.

[mowogo]

8 minutes ago, wowzz said:

Only if you are planning on cruising on CCL for at least 28 days a year for for the next three years or so.

Though global factors could reduce the window to actually gain the benefit.  

[Jeal]

It’s doubtful that we would cruise 28 days a year on CCL. 

[Guest ldtr]

38 minutes ago, Jeal said:

Soooo - is this a good time to buy 100 shares of CCL stock?

If you cruise a lot on CCL owned cruise lines such as Princess, HAL, P&O etc the tax free OBC will more than pay for the stock investment pretty quickly (as few as 4 - 14 day cruises.  If you are expecting a positive return on the stock itself , not really.

[VibeGuy]

40 minutes ago, Jeal said:

Soooo - is this a good time to buy 100 shares of CCL stock?

 

would it give you more pleasure than lighting five hundred dollar bills on fire?  Because that’s roughly what you’d lose if the stock reverts to the 52-week low.   In terms of investment potential, the stock is a dog and it doesn’t matter how cheap you get the dog.  Now is just as good of a time as almost any to buy a volatile stock with crap fundamentals.  
 

If you have four or five weeks of Carnival Corporation cruises sailing in the next few months, absolutely, this likely isn’t the worst time to buy.  But you need the OBC to make the short term volatility and structural risk of the investment make sense. 
 

If you’re bound and determined to join this parade of volatility and woe, do it the cheapest way possible.  Today it’s 10% cheaper to buy CUK (A US-traded version of the London traded Carnival plc stock) than the more commonly held CCL.  You get all of the OBC benefits and reduce your downside risk 10% in real dollars because you have less on the table to lose completely. 
 

Don’t just take my word for it.  Of the twenty-one analysts making recommendations on Carnival stock, six think you should buy more and fifteen think you shouldn’t.  Of those fifteen, four think you should actually sell what you already have. 

[VibeGuy]

My guess of 4-5 weeks of OBC to offset risk in the near term is based on the vaguely optimistic notion that the stock has found the bottom.  While it’s *possible* that it could drop below that, I think it’s *unlikely*.   I don’t think you need to cover the full cost of the unit with OBC to make the purchase vaguely prudent. Just a lot of it. 

[Jeal]

Thank you wowzz, VibeGuy, ldtr, and Mowogo for responding. I appreciate your taking the time to respond and your knowledge! 

Edited March 27, 2023 by Jeal

[Sweetrosie]

1 hour ago, Jeal said:

Soooo - is this a good time to buy 100 shares of CCL stock?

My question too...  I'm not cruising for 90 days a year though...

[Shawn5]

Good WSJ article on CCL stock (March 27 edition)

 

https://www.wsj.com/articles/carnivals-ship-will-come-in-eventually-3c738d88?st=ja74cpaa11bnirf&reflink=desktopwebshare_permalink

[wowzz]

6 hours ago, Sweetrosie said:

My question too...  I'm not cruising for 90 days a year though...

You don't need to. Two fourteen day cruises a year will generate $500 obc. It is a simple exercise to determine when you will reach "break even" based on the share price. 

[caribill]

1 hour ago, Shawn5 said:

Good WSJ article on CCL stock (March 27 edition)

 

https://www.wsj.com/articles/carnivals-ship-will-come-in-eventually-3c738d88?st=ja74cpaa11bnirf&reflink=desktopwebshare_permalink

 

This chart from the article shows how good predicting future profitability has been for CCL Coro.

 

A year ago 2023 was predicted to be a profitable year. Now losses are predicted.

 

But wait, now 2024 is predicted to be profitable. A year from now we will find out if the above chart will be repeated.

 

[Over from NZ]

Go back before 2020 - they were an awful investment a lot longer than before 2020. They're still losing fistfuls of money every day.. they're carrying a mountain of debt in a market that's repricing interest rates higher.. they ain't going to be back in profit for a long time.. and they sure as heck ain't going to be paying dividends for a very, very, long time. 

[wowzz]

26 minutes ago, Over from NZ said:

Go back before 2020 - they were an awful investment a lot longer than before 2020. They're still losing fistfuls of money every day.. they're carrying a mountain of debt in a market that's repricing interest rates higher.. they ain't going to be back in profit for a long time.. and they sure as heck ain't going to be paying dividends for a very, very, long time. 

100 shares today will cost you $870. Two cruises a year will generate $500 obc. So, in profit after year two.

Seems a reasonable deal,  if you cruise semi-frequently, even if the share price falls again. Our six cruises in 2022 and 2023 made the purchase of shares a no-brainer.

[caribill]

14 hours ago, ldtr said:

For those that think customer service is having a material negative impact, CCL just came out with the earnings release for their most recent quarter.

 

CCL had an EBITDA profit of $382 over 32 million better then guidance.  Their GAAP loss of 690 million was also better than guidance.  In spite of higher fuel and interest costs.

 

 

And yet, the market responded as follows to this news:

 

·  Due to substantial dilutions and debt growth, Carnival's "full recovery" EPS is likely around 70-75% below its 2019 level.

·  Carnival's enterprise value is also at its pre-pandemic level, suggesting the stock is priced as if a full operating income recovery is inevitable this year.

·  While Carnival's operating income may recover this year, household financial strain and rising costs (specifically crew wages) could easily upset the recovery.

 

·  CCL appears overvalued today since it could lose most of its value if its operating income does not normalize quickly, as its low credit rating limits its financing capacity.

 

Some highlights from the stock analysts call: (Remember that this information applies to CCL Corp as a whole, not to an individual brand unless indicated.)

 

In the first quarter, we outperformed our guidance on all measures: Revenue, costs, adjusted EBITDA and earnings, while overcoming over $30 million in headwinds from fuel price and currency since our prior guidance. Thanks to the dedicated efforts of our 160,000 amazing team members around the world. We had sequential improvement in our occupancy gap to 2019 from 19 points in Q4 to 13 points in Q1 on increasing capacity, which is now above 2019 levels. We anticipate being just 7 points or less away from 2019 occupancies in the second quarter, well on our way to historical occupancies this summer.

 

Equally important, we also drove ticket prices higher and continue to throttle back on our opaque channel while also maintaining outsized onboard revenue growth where we have not lost sight on the cost side of the business.

 

On a per ALBD basis and holding fuel price and currency constant to 2019 levels, we were roughly 60% back to 2019 EBITDA in our first quarter, better than our expectations to be halfway back. We expect to be 2/3 of the way back in our second quarter as we progress back to levels that rival 2019 as we exit the year.

 

To that end, wave season has been phenomenal. It started early with record Black Friday booking volumes and has continued to build. We achieved our highest ever quarterly booking volumes in our company's history, and we actually had our best weekly booking volume for this wave the last week in February. And the good news is that strength in bookings has continued into March, supporting our revenue expectations for the remainder of the year.

 

In North America, our Carnival brand continues to propel us forward, breaking new booking records every single week in January and February. Booking volumes for our North American brands have been running in excess of record 2019 levels for the last 6 months and booking lead times are now back to peak levels.

 

Australia is about a year behind the U.S. in terms of the recovery cycle. And while Asia is still about two years behind, we successfully resumed operations there with the ships now in Japan and one in Taiwan beginning this summer.

 

Turning to China. The country still has not reopened to international cruise travel, which accounted for 1 million of our guests pre-pause and was a significant presence for Costa.

 

Overall, with normalized onboard protocols, we are on an even playing field to land-based alternatives, enabling us to close the unprecedented and unwarranted 25% to 50% value gap to land-based offerings over time. We're capitalizing on pent-up demand for cruise vacations, building on our large base of loyal guests as we will increase awareness and consideration among new to cruise guests.

 

Our investment in advertising and sales support is clearly paying dividends. For example, we've been upsizing our UK TV presence for P&O Cruises, the brand synonymous with cruising in the UK. Not only has P&O Cruise has been enjoying a measurable increase in brand awareness as a result, but the brand has also experienced record bookings over the last three months. This is not surprising given the high correlation between TV advertising awareness and propensity to book in the UK.

 

And importantly, our growth is weighted towards three of our highest returning brands: Carnival Cruise Line, AIDA and P&O Cruises UK, following our portfolio and fleet optimization.

 

We have or are in the process of refreshing segmentation research across all major source markets to confirm and resize our target audiences by brand post-pause. Our brands have identified clear differentiators, and we are leveraging these insights to fine-tune each brand's positioning and marketing efforts to attract new-to-cruise guests and increase loyalty. For example, we've developed new brand affinity partnerships like Porsche Club of America for Princess, which is an efficient way to drive new-to-cruise demand to a brand that will resonate with its target guests.

 

We are redesigning websites to increase online traffic, improve conversion and achieve higher pre-cruise onboard sales. We are refining our onboard apps to increase communication and engagement as well as capturing incremental onboard revenue.

 

We are refining our onboard apps to increase communication and engagement as well as capturing incremental onboard revenue.

 

We are sharpening our revenue management tools to drive incremental revenues through increased bundled package offers and new upgrade programs. We're also opening deployments further in advance, and testing and learning pricing strategies to support earlier occupancy builds and to push the booking curve out further. We are actively reducing already low cancellation levels through changes to deposit policies and new fare structures.

 

In the Caribbean, we are building on our strategic advantage with a meaningful expansion of Half Moon Cay, which is consistently voted best private island. And of course, we're also developing our largest Caribbean destination yet, our Grand Bahama port. It's being designed to deliver wow fact tailored to Carnival Cruise Line guests to drive higher revenue yields and margins. Importantly, this development is strategically located to deliver a wide array of lower fuel consumption itineraries, furthering our carbon reduction efforts.

 

Turning to our capital structure. We've completed two more export credits this quarter, bringing the total remaining available to $3.2 billion. The export credits are not only an attractive way to fund new ships, but they also serve to effectively roll debt that's maturing at attractive rates. In fact, the majority of export credits coming due in the next few years will be replaced by new export credits available to be drawn. As a result, we expect export credits to remain a similar portion of our debt structure at preferential low to mid-single-digit interest rates.

 

We have our lowest order book in decades, which is 4 ships on order through 2025, and there will be none in 2026, plus our second incredible luxury expedition ship for Seaborne to be delivered later this year. Following a strong and prolonged wave season, customer deposits are running up double digits, contributing to adjusted free cash flow turning positive this quarter and for the full year.

 

We believe we are well positioned to pay down near-term debt maturities from excess liquidity and have no intention to issue equity.

 

For the remainder of 2023, our cumulative advanced booked position is at higher ticket prices normalized for future cruise credits when compared to strong 2019 pricing with booked occupancy that is solidly in the higher end of the historical range. The strong cumulative book position along with bundled package offerings and strong pre-cruise sales has resulted in total customer deposits achieving a first quarter record of $5.7 billion, surpassing the previous first quarter record of $4.9 billion, a 16% increase.

 

We now expect capacity growth for the full year 2023 to be 4.5% when compared to 2019.

 

The absolute onboard spending on our European brands is less than that on our North American brands. Our European brand guests tend to drink a little bit more but gamble a lot less.

 

Insides are the majority of what we've got left in 2023 inventory. And by the way, I wouldn't call them less desirable. They're just different. And people have a great time in those cabins.

 

For the last 20 years, good times and bad, our business model holds up very well. And the reason why it holds up so well in a recession, if one comes, is because we are an incredible value to land. Anywhere from 25% to 50% lower than the land-based equivalent. And so when people are looking to figure out how do I make my dollar go further, we can provide better value for their money for their vacation, which is still incredibly important, even more so now than it used to be in the past that people will not give up.

 

We are projecting net per diems up 3% to 4% for the year, and that's inclusive of FCC drag. So without that drag, it would be even higher.

 

We have a phenomenal footprint in the Caribbean. Half Moon Cay being pretty much a jewel of the Caribbean in the Bahamas.

 

With the ability for us to generate more differentiated experiences through Grand port, that will absolutely help the Carnival Cruise Line brand, not only on the yield side, but also on the cost side. We're talking about being able to put another incredibly attractive destination in a very short distance from South Florida, the East Coast of the United States, which helps us tremendously on the cost side, on the carbon footprint side.

 

And with what we're doing on Half Moon Cay, by adding a pier, that will open up a lot more opportunity for us to bring bigger ships to that island, more guests, a better guest experience and more opportunity to generate not only enhanced ticket pricing because of that, but also onboard spend in the form of spending on board our destinations.

 

There are other things that we're doing specifically with respect to introducing fare types that brands have never had before, some brands doing non-refundable deposit fares. Thay have never done that.

 

 

 

[wowzz]

1 hour ago, caribill said:

Equally important, we also drove ticket prices higher and continue to throttle back on our opaque channel while also maintaining outsized onboard revenue growth where we have not lost sight on the cost side of the business.

What does "opaque channel" relate to in the above comment.

[VibeGuy]

4 minutes ago, wowzz said:

What does "opaque channel" relate to in the above comment.

Channels like interline rates for airline industry, casino rates (but not comps), wholesales to incentive/promotional channels like land casinos - anything where they’re selling below advertised prices that the public can see.  
 

On some of the coastal repos in the next eight weeks, Princess has pricing in the opaque channels as low as $10/day PPDO while the public channels are closer to $60-70. 

 

[VibeGuy]

From the WSJ article:

 

“Getting back to a balance sheet that looks like it did three years ago could easily take the rest of this decade and won’t be free of bumps, but a successful deleveraging could justify a share price two to 2½ times as high as today’s level even with the higher share count. Staying on board for that sort of compound annual return is worth a few bouts of seasickness.“

 

if it could easily take the rest of the decade, imagine how long it could take if it wasn’t easy.  My guess is more like 10-11 years and I don’t see the progress as linear. 

 

As for the analyst call?  I’ve seen fewer red flags at an actual bullfight.  They continue to downgrade the guidance while swearing they’re turning the corner.  
 

Let’s assume they can double the share value by the end of the decade.  My quick math says that’s 11% annual equity appreciation.   Nothing in the current situation gives me confidence in that kind of yield year over year with this debt albatross around their neck and so many external forces pushing on costs and revenues. 
 

When Carnival Corp had a solid balance sheet and revenue growth and enough surplus liquidity to pay a dividend, I was very bullish on the stock.  I literally suggested my elderly grandparents who were classic dividend investors buy some.  People liked the product, the lines were operationally profitable, the balance sheet looked good, growth could come from both pricing power and gradual increases in capacity. Sure, there were macro pressures (fuel pricing was more impactful back then - smaller ships meant fewer guests to spread the fuel bill across) and it was still a consumer discretionary spend company, but it wasn’t a come-from-behind speculative play.  
 

This debt is crushing. 
 

Great people, a smarter executive team than in years past, probably improved cost discipline, a path to historical occupancy and pricing - like, operationally / EBITDA, I really don’t hate the company.  But the margins make it really, really hard to service this debt, let alone retire it. 
 

Equity investments shouldn’t make small-time investors seasick for an 11% YOY return.  
 

[wowzz]

11 minutes ago, VibeGuy said:

Channels like interline rates for airline industry, casino rates (but not comps), wholesales to incentive/promotional channels like land casinos - anything where they’re selling below advertised prices that the public can see.  
 

On some of the coastal repos in the next eight weeks, Princess has pricing in the opaque channels as low as $10/day PPDO while the public channels are closer to $60-70. 

 

Thanks for the information.  Every day is a school day !

[LouChamp]

Aloha.  I subscribe to The NYT and WSJ as well as other publications and have stock in the big three. I love the colorful language companies use and barely believe nowadays anything they and the so called analysts say. I am blessed to have made my money the old fashioned way and rely on a few trusted olde timers and stay away from new investment instruments. In my opinion the companies have to continually attract new cruisers who won’t notice cutbacks in quality of experience but want bells and whistles. They are so loaded with debt that even full 105 percent occupancy over years will not pay for the debt service.  They are in some way to big to fail because the banks and other lenders are married to them. The can is being kicked down the road. Even the shipyards and their lenders who pay for construction are married to the companies. Any disruption to this very delicate balance will further undermine this delicate dance. 

[chisoxfan]

5 hours ago, wowzz said:

You don't need to. Two fourteen day cruises a year will generate $500 obc. It is a simple exercise to determine when you will reach "break even" based on the share price. 

I am not sure why posters focus on OBC payback for holding a stock that may go bankrupt. For individuals only interested in OBC, not 'investment', simply buy a hundred shares within the specified time before sailing, document the purchase, and sell immediately.

No risk involved. 

[wowzz]

7 minutes ago, chisoxfan said:

I am not sure why posters focus on OBC payback for holding a stock that may go bankrupt. For individuals only interested in OBC, not 'investment', simply buy a hundred shares within the specified time before sailing, document the purchase, and sell immediately.

No risk involved. 

Yes, but we have four cruises booked, and in  the UK you cannot apply for obc more than three months in advance, so we would need to buy and sell four times, with associated trading costs and stamp duty each time.

And whilst I know you never can say never, bankruptcy is highly unlikely now, compared to two years ago.

[chisoxfan]

4 minutes ago, wowzz said:

Yes, but we have four cruises booked, and in  the UK you cannot apply for obc more than three months in advance, so we would need to buy and sell four times, with associated trading costs and stamp duty each time.

And whilst I know you never can say never, bankruptcy is highly unlikely now, compared to two years ago.

Stock trading is generally 'free' in the US. Again everyone has their view regarding the viability of CCL and my insight is no better than any other. Just offering this up for those in US who want to buy stock solely for OBC and may feel saddled with a questionable investment. JMHO

 

Did not realize stock trading was not 'free' in the UK. As they say you learn something everyday.

 

 

[wowzz]

13 minutes ago, chisoxfan said:

Did not realize stock trading was not 'free' in the UK. As they say you learn something everyday.

Plus the 0.5% stamp duty paid on the purchase cost of the shares.

[chicgotgame]

1 hour ago, chisoxfan said:

I am not sure why posters focus on OBC payback for holding a stock that may go bankrupt. For individuals only interested in OBC, not 'investment', simply buy a hundred shares within the specified time before sailing, document the purchase, and sell immediately.

No risk involved. 

I usually wait til it bounces up .50 cents then sell. 

[chisoxfan]

22 minutes ago, chicgotgame said:

I usually wait til it bounces up .50 cents then sell. 

Well if you know it is going to go up you could make a fortune!  I have been 'lucky' and made a few cents a share within the hour that my trading usually occurs. I am sure people are doing this (quick buy and turnaround) but never see comments on this....