Cruise tourism stocks Royal Caribbean (RCL -0.05%), Norwegian Cruise Line Holdings (NCLH -1.39%), and Carnival Corporation (CCL -2.65%) all raced out of the gate on Tuesday morning. As of 10 a.m. ET, Royal Caribbean stock is up 3.7%, Norwegian Cruise is gaining 5.5%, and Carnival is leading the pack higher with an 8.6% gain.
There's a reason Carnival is doing so much better than the rest, by the way.
Yesterday evening, Carnival announced that the week between March 28 and April 3 was the busiest booking week in its history, a double-digit improvement over its previous best-ever week.
With more than 95% of its 23-ship fleet back in service, Carnival is well positioned to take advantage of the tidal wave of demand for cruising -- and the company expects its final ship to return to service in May, putting Carnival at 100% strength. Indeed, despite selling multiple (smaller and older) ships during the pandemic to reduce costs, Carnival says that by the end of this year, it will actually have more capacity (as calculated by "available lower berth days") to carry passengers than it had in 2019 -- and that it will keep growing in size in 2023 and beyond.
In other words, Monday's news is better news for Carnival stock than for Royal Caribbean or Norwegian -- which is probably why Carnival stock is performing better than Royal Caribbean or Norwegian stock today. As Carnival boasted in its announcement, "Carnival has led the industry in terms of restart and customer demand."
That being said, all of these cruise lines basically cruise the same areas and cater to similar markets, so what's good news for Carnival will presumably be good news for its rivals as well. This performance implies that the cruise business as a whole is returning to health.
But how soon will cruise companies return to profitability? According to forecasts compiled by S&P Global Market Intelligence, all three of these major cruise line companies can expect to see their first post-pandemic profitable quarter in Q3 2022 and to return to full-year profitability in 2023.
That year, investors can look forward to $1.55 per share in profit for Carnival, $1.87 per share for Norwegian, and $5.56 per share for Royal Caribbean.