Is Carnival Stock a Buy?
With the breakout of the COVID-19 pandemic earlier this year, the cruise industry is facing a historically tough challenge. As numerous countries imposed lockdowns and closed borders, cruise companies joined airlines in grounding their fleets as cancellations mounted with alarming speed. Carnival (NYSE: CCL), a leading player in the cruise industry with nine different cruise brands, was no exception. The company had to deal with a slew of cancellations and a plunge in forward bookings as people canceled their vacation plans to instead hunker down at home.
Carnival's recent earnings report demonstrates the financial damage wrought by the coronavirus. For the second quarter of 2020, passenger ticket revenue plunged by 86.3% year over year to just $446 million, while total revenue declined by a sharp 84.7% year over year to $740 million. The company reported an operating loss of $4.2 billion for the quarter, though part of the loss can be attributed to goodwill and other impairments amounting to close to $2 billion.
Carnival's stock price has plunged 69% year to date, although it has almost doubled from the low of around $8 back in early April. Could the shares present great value for the astute investor?
Source Fool.com
