Carnival Share Price Forecast: CCL is Sailing on Massive Debts

Carnival share price has been under intense pressure for the past few weeks amid the lingering impacts of the coronavirus pandemic. The CCL stock has crashed by 43.9% in price over the year and more than 4% in the past week.

2022 Outlook

Carnival share price has been on a strong bearish run for the past week amid concerns about the company. Carnival Corporation has made a strong recovery amidst the lifting of travel bans worldwide. However, despite, the soaring demand in the travel sector and strong growth in operations in the third quarter, CCL missed analysts’ estimates.

Carnival’s revenue climbed by nearly 80% in the third quarter of 2022 compared to the previous quarter, reflecting sequential improvement. Occupancy in the same quarter was up by 15% from the previous quarter. According to the report by the company, booking volumes for all future sailings are significantly higher than the pre-pandemic levels in 2019.

Despite the improvement, the world’s largest cruise line has been sailing on massive debts which it took during the pandemic to aid in its survival. As of the third quarter, Carnival’s debt had climbed to $28.5 billion. The firm also reported an adjusted net loss of $688 million for the third quarter.

During the third quarter, the company completed a $1.15 billion equity offering of its common stock. The company plans to use the net proceeds from the offering for general purposes, which could include addressing 2023 debt maturities.

With the soaring inflation, the Fed is expected to resume its aggressive rate hikes. This will see the company suffer as its floating rate debt would rise. This could also slow travel demand during the holidays due to recession fears.

Carnival Share Price Forecast

The daily chart shows that Carnival share price has been under intense pressure for the past month. At the time of writing, it was trading slightly higher at 680p. The stock has managed to move below the 25-day moving average and the 50-day exponential moving average. It is trading slightly above the 50-day moving average.

As such, a flip below the important support at 650p will have bears eyeing the next support level at 589p. However, a move above the 25-day moving average at 720p will initiate a bull run.

CCL Price Chart

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