US stocks were declining in Monday trading as the fear of a second COVID-19 wave increased. Cruise operators were some of the worst performers, with shares in Carnival Corporation leading the way by dropping 2.7%.
Over the weekend, 22 states in the US reported an increased number of coronavirus cases. In addition to that, the cases in other parts of the world have also recently increased. The strict lockdown restrictions in countries like China and Peru were not enough to contain the spread of new coronavirus cases.
Doctors are concerned that there might be a second pandemic wave if countries do not take the right measures. Provoked by the fear of another pandemic crisis, governments are considering slowing down the resuming of businesses and implementing stricter social distancing rules.
If there are new travel bans and governments put a halt on reopening businesses, this would be devastating for cruise operators. Since these companies hope for recovery as soon as people start booking vacations, the fears of another pandemic wave will seriously hurt cruise operators. This is why it was no surprise that the shares in Carnival Corporation declined in Monday trading.
As the coronavirus cases continue to increase, there is a big chance that international regulatory bodies and the Centers for Disease Control and Preventions would not lift restrictions on cruise ships in the near future. This would mean that the recovery of Carnival Corporation will be paused until vessels are allowed to sail and there are enough people who will be willing to book vacations.
Analyst stock price forecast and recommendation
According to CNN Money, 16 analysts offering 12-month price forecasts for Carnival Corporation have a median target of $14.75, with a high estimate of $53.00 and a low estimate of $5.00. The median estimate represents a -24.13% decrease from the last price of $19.44.
The same media also offers the recommendations of 20 investment analysts who have a consensus rating of “Hold” for the Carnival Corporation stock. Out of the 20 analysts, 12 ranked the stock as “Hold”, 4 as “Buy”, 3 as “Sell” and 1 – as “Underperform”.