Please ensure Javascript is enabled for purposes of website accessibility

Why Carnival Corporation and Norwegian Cruise Line Stocks Popped Today

By Rich Smith - Updated Mar 8, 2021 at 4:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

No one's cruising right now, so...it's time to raise prices?

What happened

Shares of cruise line stocks Carnival Corporation (CCL -3.31%) and Norwegian Cruise Line Holdings (NCLH -4.08%) both jumped more than 4% apiece in early Monday trading, and are still notching gains of 2.3% and 2.4%, respectively, here at the 3:15 p.m. EST mark.

So what

There's no obvious news afoot on either of the two cruise stocks, specifically, nor on Royal Caribbean (RCL -3.52%), which peaked lower than its rivals but is actually ahead of them right now, up 2.5%. Over the weekend, however, there was some news of interest to cruise investors in general: As CruiseIndustryNews.com (CIN) reported Saturday, investors are pushing the various cruise line companies to raise their prices in anticipation of a return to cruising later this year.

Origami dollar folded into an arrow pointing up.

Image source: Getty Images.

Now what

With the pandemic still in full swing, and none of the major cruise lines cruising just yet, raising prices on a service that no one can yet provide may seem like strange advice. But here's the thing: CIN reports that cruise reservations are "flying off the shelves," and the cruise companies are enjoying "record sales volumes."

Analysts think this is indicative of strong pent-up demand and are encouraging cruise companies to take advantage of this surprising seller's market by raising prices. That way, once cruising does start up, they can maximize the cash they bring in to help pay back all the debt they've taken on to help them through the recession.

That sounds like good advice to me. If cruise companies decide to take it, that would be a good reason to become incrementally more positive about cruise line stocks.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Carnival Corporation Stock Quote
Carnival Corporation
CCL
$13.13 (-3.31%) $0.45
Royal Caribbean Cruises Ltd. Stock Quote
Royal Caribbean Cruises Ltd.
RCL
$55.41 (-3.52%) $-2.02
Norwegian Cruise Line Holdings Ltd. Stock Quote
Norwegian Cruise Line Holdings Ltd.
NCLH
$15.30 (-4.08%) $0.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
331%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.