What happened
Shares of Carnival (CCL 1.13%) (CUK 1.65%) closed out the week up 2.3% on Friday after an analyst raised his price target on the cruise operator because of improving fundamentals in the industry.
So what
Citigroup analyst James Ainley raised his price target on Carnival from $30 to $34, believing the pullback in the cruise stock gave investors a "great entry point."
Image source: Getty Images.
Ainley pointed to the earnings report issued by Royal Caribbean (RCL 2.15%) on Wednesday, indicating he saw it as a strong commentary about the business. The market agreed, as it sent shares up 7% yesterday, though today the stock ended mostly flat.
Carnival's stock is down 26% from the recent highs it hit in early June over fears that the delta variant of COVID-19 would sink the travel and tourism industry's recovery, which was only just getting started.
Now what
Carnival's Princess Cruises brand recently completed its first Alaskan itinerary and yesterday announced its calendar to Alaska for the 2023 sailing season.
The company also bounced higher on Royal Caribbean's earnings and continued moving higher today, perhaps because it is the industry's largest. Just as it takes a long time to turn a big ship around, once it builds up a head of steam, it's not easy to stop. And it just might be best to climb aboard to avoid its wake.
