Carnival Corporation Share Price Forecast December 2021 – Time to Buy CCL?
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Shares of British-American cruise operator Carnival Corporation (LSE: CCL) are in the green today, after closing at 1340p as of December 8th (17:51 GMT). As global financial markets are seeing higher volatility than normal, Carnival has been one of the worst-performing companies, with its shares down by 18% over a year.
Carnival Corporation – Technical Analysis
According to the financial statement released by Carnival Corporation, the market cap of the company is at £1.521 trillion with total assets worth £3.888 trillion. Revenue for 2020 was at £437.22 billion with a profit margin of -182.95% compared to £1636.86 billion.
Oscillators such as Relative Strength Index (14)(46.9), Stochastic %K (14, 3, 3)(53.6), Commodity Channel Index (20)(−6.3), Average Directional Index (14)(30.8) and Awesome Oscillator(−183.0) are neutral. Moving averages such as Simple Moving Average (20)(1349.7), Exponential Moving Average (30)(1382.8), Simple Moving Average (30)(1421.6), Exponential Moving Average (50)(1436.1) and Simple Moving Average (50)(1486.4) are indicating a sell action.
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Recent Developments
For those unaware, Carnival Corporation is a cruise operator which serves North America, Europe and Australia. The company merged in 2003 with P&O Princess Cruises to form one of the largest leisure travel companies in the world. It’s not really surprising why Carnival shares have fallen. The latest news about the new strain, Omicron, is worrying the WHO along with governments around the world. As a result, travel restrictions are being tightened up with more tests now needed to travel abroad which is affecting Carnival.
Carnival could see lower demand even for bookings that could be placed well in advance due to the negative traveller sentiment. For investors it becomes difficult to commit to a cruise stock in this environment as we don’t know what the picture will look like next summer. Since, Carnival’s main demographic target is middle-aged and older who are likely to be more cautious than younger travellers.
Carnival shares dropped a huge 16%, as the FTSE 250 index itself dipped by a non-trivial 3.2% On November 26th . By late November, investors stepped in and bought the shares, which has resulted in them recovering most of their value lost since 26 November. The reason why the shares have picked up can also be attributed to incoming company results continuing to be healthy and the possibility that the new strain isn’t as severe.
Should You Buy CCL Shares?
Carnival shares are trading at levels above their low of the past year. The shares will be on track to move below the lows seen in 2020 if they go below 1000p. Thus it’s clear that the shares are currently priced low when compared to their historical price, but that doesn’t mean that they are undervalued. According to the company’s latest Q3 results, occupancy on its cruises increased from 39% in June to 59% in August. But it’s still too early to gauge demand even with eight of the nine cruise brands offering some kind of service. Many cruises were limited to scenic cruises without ports of call which generated cash flow but are priced well below the attractive destination-rich cruises.
While the Omicron virus poses less of a risk compared to earlier strains, the market is still trying to figure out how to tackle it. Carnival’s share price has declined by 10% in the past year, with its financials being badly affected by the pandemic. While all the above signs are positive, investors should still wait for more proof of the company’s turnaround before buying up the shares.
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