Without any real indication of when cruise ships will begin sailing again, Berenberg analyst Stuart Gordon believes Carnival (NYSE:CCL)(NYSE:CUK) is in an untenable situation, one he says is "unsustainable."

Because service remains suspended, there's no timetable for when it will be able to resume service at meaningful levels. That plus Carnival's surging levels of debt led Gordon to downgrade the cruise line leader to sell from hold, and assign a $14 per share price target.

Although that's a 40% hike from his prior $10 per share target, it is 30% below where Carnival currently trades, indicating a significant pricing downdraft awaits the cruise line.

Ship hitting big wave

Image source: Getty Images.

A rogue wave

Gordon isn't the only one worried about Carnival's "ballooning" debt levels. On Wednesday, ratings agency Moody's said it was considering downgrading the cruise operator's deeper into junk territory. 

It's becoming a dire situation for the industry, and despite delaying cruises for months more, some ports of call are making the situation worse. Canada just said all cruises from its ports are canceled until March 2022.

It makes it difficult to see how small cruise lines can stay afloat when even the largest like Carnival have to keep borrowing money just to keep ships maintained. It is also dry docking ships for renovation ahead of schedule since they're not sailing anytime soon.

It's not just Carnival that Gordon sees being hurt. He told investors in a research note he is "negatively disposed" to the entire leisure industry.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.