The cruise stocks have been severely punished in recent years. For example, from all-time highs to today, Carnival Corporation lost nearly 87% of its value, while Royal Caribbean Group fell 72% and Norwegian Cruise Line nearly 80%.
At this point, with tourism reopening and adapting to the new normal, some analysts believe that these companies could start to recover in the short term. But this is not the case with Deutsche Bank.
Chris Woronka, an analyst at the investment bank, said: “While we feel that the cruise ship perma-bulls see the Actions of cruises as significantly oversold here, we think it’s optically very different for most others to have the conviction that there is an actionable bottom.”
“Recent conversations with a wide swath of investors cast our view that there is not likely to be much sustainable buying pressure in the near term (despite short covering and market-related trade bounces), particularly given the relative performance of the Actions against other key sub-sectors and a series of known risks (as well as some unknown ones) in the next 6 to 12 months”, added the specialist.
Specifically, the study reveals that there is a “trifecta of concerns” about Actions cruise ship: upcoming debt maturities in an environment of rising interest rates, the potential for economic weakness, initially confined to Europe but now including the United States, and stubbornly rising oil prices threatening to undermine potential margin .
“Our message is clear: We believe it is still too early to bottom fish for cruise stocks,” Woronka said.