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Why Carnival Stock Popped Today

By Rich Smith – Sep 9, 2021 at 12:14PM

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One of Carnival's fleets will be fully back in service before next summer.

What happened

Shares of Carnival (CCL 1.85%) bounced back from a rough Wednesday to score a respectable 3.9% gain through 11:20 a.m. EDT on Thursday, responding to some good news from the cruise line operator yesterday.

So what

Carnival got hit by news of new CDC recommendations yesterday. Specifically, there was an advisory that (among other things) fully vaccinated passengers should wear masks on ships, making the prospect of paying thousands of dollars for a cruise somewhat less appealing.

Nevertheless, for passengers who are determined to cruise, there now may be more options to do so. As Carnival announced in the afternoon, by spring of next year, the entire fleet of its Holland America Line will be back in service, when its remaining ships have all resumed cruising.  

The Noordam resumes with a March cruise in Japan, the Oosterdam will begin cruising again on May 1 in the Mediterranean, and the Westerdam returns a week later in Alaska. The Volendam and Zaandam will be back later in May.

Paper boat reads NEWS

Image source: Getty Images.

Now what

Six other Holland America vessels have already returned to service or are set to resume by this December, meaning the line's whole fleet should be back in operation before next summer begins.

COVID-19 remains a wild card even in this scenario. Even without a fifth wave of the virus disrupting operations, yesterday's CDC advisory reminded investors that the disease has the potential to depress consumer interest in cruising, and upset investors, too. Until this pandemic is well and truly over, it might be jumping the gun to assume that even putting its entire fleet back to work will be enough to turn Carnival profitable again.

 

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

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