Cruise line stocks were big winners during the first week of June. The second week, they didn't fare as well. Shares of Carnival (NYSE:CCL) (NYSE:CUK)Norwegian Cruise Line Holdings (NASDAQ:NCLH), and Royal Caribbean (NYSE:RCL) declined sharply this week, even if they ultimately only gave back a chunk of the prior week's gains in which the three publicly traded operators soared between 34% and 43%.

There was a lot going on this week. There were five price target boosts between the three stocks. However, enthusiasm quickly faded as rising coronavirus cases and iffy economic news threatened to delay a return to sailings come early August. Let's take a closer look at the week that was for the cruise line industry.

A pair of empty deck chairs on a cruise ship overlooking the water.

Image source: Getty Images.

Cruising for a bruising

This past week wasn't kind to investors. The market slipped nearly 5% for the week, with Thursday's sell-off doing most of the damage. The cruise line stocks took an even bigger hit, falling between 7% and 12% this week.

  • Carnival: down 7%.
  • Royal Caribbean: down 12%.
  • Norwegian Cruise Line: down 9%.

The week began with Carnival's Cunard line pushing out the pause in its operations for some of its ships through November. All three companies still expect to resume sailings on their flagship lines come August, so the Cunard news isn't a deal breaker. 

A couple of Wall Street pros also updated their notes on the industry. Steven Wieczynski at Stifel and Brandt Montour at J.P. Morgan jacked up their price targets on the cruise line shares that they cover.

Stock/Analyst New Price Old Price
Carnival/Stifel $30 $17
Carnival/J.P. Morgan $20 $16
Royal Caribbean/Stifel $85 $62
Royal Caribbean/J.P. Morgan $72 $50
NCL/J.P. Morgan $24 $18

Data source: respective analyst firms.

The revised price goals aren't necessarily bullish analyst moves. Analysts are just catching up to the soaring share prices. All three stocks were already trading comfortably above the earlier price targets, and there's not a lot of upside from current levels for J.P. Morgan's new numbers. 

Stifel's Wieczynski has a more bullish view on the country's two largest operators. He's not sure on when cruise lines will start sailing again, but he thinks the Carnival and Royal Caribbean should stabilize in 2021 based on early booking trends. If there isn't a virus reoccurrence, he believes returning to last year's profitability levels could happen sooner than his earlier forecast. 

The good times didn't last. Thursday's sell-off was brutal, and it didn't help that confirmed COVID-19 cases are spiking in Florida and Texas -- the two states that Carnival was expecting to use for its early August sailings. 

The good news is that all three stocks are still having a strong showing in June. The stocks have soared 18% to 31% higher through the first two weeks of June, a month that has generally been solid for broader transportation stocks. The gains may or may not go on, but the volatility is likely to continue.