For most of the last two months and change, cruise line stocks have moved up -- and largely down -- together. When Carnival (NYSE:CCL) (NYSE:CUK) shares move in any given week, Royal Caribbean International (NYSE:RCL) and Norwegian Cruise Line Holdings (NYSE:NCLH) go along for the ride. A rising tide lifts all cruise ships?

There was a bit of divergence last week. Carnival stock rose 2% for the week, moving higher after announcing firm plans to start sailing again on Aug. 1 through eight ships out of three ports in Florida and Texas. Norwegian tumbled 10% last week, slipping after an SEC filing raised concerns about the cruise line's ability to continue as a going concern. Royal Caribbean split the difference, closing out with a 2% decline for the week. 

A pair of deck chairs overlooking a cruise ship's path.

Image source: Getty Images.

Passing ships

It's not a bad thing to see the three publicly traded cruise line stocks go their separate ways. It's actually a healthy sign that the market is finally starting to assess each player on its own merits.

You have to go back a long way to find the last time that each stock had its own compass. A week earlier was a great week for all three stocks. Carnival and Royal Caribbean rose 17% and 14%, respectively. Norwegian Cruise Line led the way with a 27% pop. All three moved lower the week before that. Carnival and Royal Caribbean clocked in with identical 5% declines, and the typically more volatile Norwegian tumbled 12%. 

This past week was the exception to the rule. Investors either love all of the cruise stocks one week or they hate them, and despite an overall strong recovery for the battered stocks over the past few weeks, Wall Street is still a landlubber. Norwegian Cruise Line continues to be one of this year's hardest hit stocks, down 79% in 2020. Carnival and Royal Caribbean are only faring relatively better, treating their shareholders to year-to-date declines of 72% and 70%, respectively.

The divergence is welcome at this point, as it means that one company won't be paying for the sins of another. Will Royal Caribbean and NCL follow Carnival into firming up their returns to travel with scaled-back fleets this summer? When Norwegian reports quarterly results on Thursday, will every positive or negative morsel be interpreted as gospel for its larger peers? 

The cruise line as a whole has taken a hit to its reputation, but each of the three players is navigating the waves differently. Royal Caribbean put out an encouraging note on Friday, pointing out that bookings for 2021 are within historical ranges of where things were in the past this time of year, with prices actually slightly higher. This is a sharp contrast to Norwegian's warning, just a few days earlier, that bookings were down. 

Royal Caribbean's update mentioned that just 45% of the passengers on its cancelled trips were requesting refunds, a welcome improvement to Carnival's update last month, with 55% of their customers wanting their money back.

Investors are at the point where they're starting to discern between the three cruise line stocks, and that's good news for stock pickers. With a potential shakeout and a likely recession looming, they can't all be winners, but maybe now we're seeing that they won't all be losers either.