The Ratings Game: Carnival’s stock drops toward four-month low as Israel-Hamas exposure fears weigh

Of the big three cruise operators, Carnival Corp. has the least cruise exposure to Israel, but its stock is getting hit the hardest — enough to put it on track for a four-month closing low.

Wells Fargo analyst Daniel Politzer estimates that the biggest cruise-related impact of Hamas’s surprise attack on Israel over the weekend is to Royal Caribbean Group
RCL,
-2.92%
,
which had 14 planned sailings scheduled from Israel through the end of the year. Next is Norwegian Cruise Line Holdings Ltd.
NCLH,

with 10 scheduled sailings, followed by Carnival
CCL,
-4.30%

with six.

For the first half of 2024, Royal Caribbean has 15 sailings from Israel scheduled, Norwegian has six and Carnival has 10.

Read: Israel vows complete siege of Gaza

In addition, Politzer said, “several sailings to Israel this week have been canceled or itineraries modified.” So with all three cruise operators, he could envision pressure on pricing in the fourth quarter and the first quarter.

Meanwhile, in terms of cruise capacity, he estimates Norwegian Cruise will be the most impacted, followed by Royal Caribbean and then Carnival.

Carnival’s stock slumped 4.2% in afternoon trading, putting it on track for the lowest close since June 5. The stock was the S&P 500 index’s
SPX
fifth worst performer on the day.

Royal Caribbean’s stock shed 2.7% and Norwegian Cruise shares gave up 1.4%.

Politzer noted Royal Caribbean’s “Rhapsody of the Seas” and “Jewel of the Seas” cruise ships, and Carnival’s “Seabourn Escape,” all homeport in Israel’s Haifa port, which is the country’s main cruise port.

“While our checks focused on itineraries that touch Israel, we acknowledge ships sailing within the entire region will likely be impacted,” Politzer wrote in a note to clients.

source

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