There's More Bad News for Carnival, Royal Caribbean, and Norwegian Cruise Line Investors

Despite their buoyant share prices, the recent developments for the cruise line stocks aren't very encouraging. An analyst is downgrading shares of Norwegian Cruise Line Holdings (NYSE: NCLH) and Royal Caribbean (NYSE: RCL) on Wednesday morning, and that follows S&P Global Ratings downgrading Carnival's (NYSE: CCL) (NYSE: CUK) credit rating -- to noninvestment grade or junk status -- on Tuesday afternoon.

With the industry now pushing out future sailings until mid-September at the earliest, it's easy to see why credit rating agencies are getting a little nervous here. All three cruise line operators have raised billions in new financing apiece in recent months, and they are years away from approaching last year's profitability levels. The stock downgrades are a different beast, as Wall Street's reacting to three investments that have more than doubled in value off their springtime lows despite fundamentals that continue to erode.

Image source: Royal Caribbean.

Source Fool.com