The Carnival share price has been in the spotlight for the past few days after the release of the company’s third-quarter earnings. The stock has been in a freefall for the past few months. It has plunged more than 65% from its highest point this year.
Why is CCL Declining?
The Carnival share price has been hovering near its all-time low amid rising concerns about the company. The transport sector was one of the most affected sectors by the coronavirus pandemic. Being the world’s largest cruise line operator, Carnival was not left behind. The company was among the heaviest hit by the pandemic.
The cruise line operator has been sailing in huge chunks of debt. Carnival Corp has more than $35 billion in debt, which pales in comparison to its $8 billion worth of shareholder equity. With the current increase in interest rates, there are concerns about whether the company will be able to pay off its debt.
Earlier this week, the company announced its Q3 2022 earnings report. This saw Carnival’s shares take a 23% nosedive as the stock market struggled to process the results. Revenues for the quarter came at $4.3 billion, more than the $4 billion in revenues for the combined first two quarters of the year.
However, Carnival Corp posted a quarterly loss of $279 million, which takes the tally to more than a billion this year.
The cost of doing business for the cruise line operator has risen while demand remains low. Therefore, with the soaring inflation, analysts believe that the company’s demand will take time to recover.
Carnival Share Price Analysis
The daily chart shows that the Carnival share price has been under intense pressure for the past few months. The stock has crashed below the 25-day and 50-day exponential moving averages. Its Relative Strength Index (RSI) has also been on a downward trajectory.
Therefore, the CCL share price is likely to extend its bearish run as sellers target the next key psychological level at 500p.