Carnival Corporation & plc (CCL) stock was up by only 9% over the past month. Although some investors are optimistic that the company will resume operations this summer, the company's financial performance in the future may not be as good as you image.
The company expects to capitalize on pent-up demand and achieve significant cost improvement, but it will take until this summer for all of the company's cruise to resume sailing. The company said it expects the monthly average cash burn rate for the first half of 2021 to be approximately $550 million, which is better than previously expected, but higher restart related spend, including the incremental spend relating to returning crew members and implementing safety protocols.
The company expects to refinance debt at lower interest rates and extend maturities during the remainder of fiscal 2021. At the same time, the company expects a net loss on both a U.S. GAAP and adjusted basis for the second quarter 2021 and full year 2021.
So, it remains to be seen the stock's performance in this summer. Wall Street analyst Chris Woronka maintained a hold rating on the stock two days ago and a price target of $25.00, but this number still suggests downside of about 15% from current levels.
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