Shares of major cruise operators dropped on Friday as investors reacted to growing signs of increased promotional efforts across the sector. Carnival Corporation (NYSE:CCL) led the decline with a 3.2% fall, while Royal Caribbean Cruises (NYSE:RCL) lost 2.7%, Norwegian Cruise Line Holdings (NYSE:NCLH) fell 1.7%, and Viking Holdings (NYSE:VIK) slid 2.5%.
The selloff comes after Truist analyst C. Patrick Scholes highlighted a “big uptick in promos and/or price cuts” aimed at boosting bookings within the cruise industry. In his September demand and pricing survey, Scholes noted “mixed trends” with “mixed implications” for cruise operators and related stocks.
Despite these promotional pressures, Scholes believes cruise companies are still positioned to meet third-quarter earnings estimates and maintain full-year guidance. He also noted that operators appear on track to achieve their targeted balance sheet objectives.
However, Scholes warned that current booking and pricing patterns suggest a normalization of growth rates, rather than the exceptional performance anticipated earlier this year. This moderation seems to be influencing investor sentiment across the cruise line sector.
His conclusions were drawn from extensive discussions with senior executives in the private travel industry over the past month, as well as analysis of “big data” on upcoming cruise bookings and pricing trends.
Carnival Corporation stock price
Norwegian Cruise Line Holdings stock price
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