After the COVID-19 pandemic left leading cruise operator Carnival with sales at zero, the beloved cruise line is making a comeback, and financial advisors are encouraging investors to take advantage.
Currently trading at a dirt-cheap valuation, Carnival’s growth story has just begun, offering a chance to buy at a price the economy may never see again, The Motley Fool reported.
“Investors sold off Carnival stock when it had to pause operations and took in no revenue during the pandemic,” the report reads. “Those who bet on its recovery have benefited from incredible gains, but the market seems to think it overshot last year, and Carnival stock is down 9% this year.”
With business booming and revenue sitting at record levels amid other beneficial financial components, experts say Carnival should soon see a huge surge in its stock.
Despite sales sitting high and the company’s net income seeing a positive turn, Carnival’s stock price is still suppressed. Net income has remained negative, the same spot it’s been in since the start of the pandemic.
Still, the Carnival rebirth story is not over.
“Wall Street expects it to turn positive as early as this summer, and the average analyst consensus for full-year adjusted earnings per share (EPS) is $1,” according to the findings. “Carnival’s stock price will likely jump at that point and begin to catch up with performance.”
So, what does this mean for the Black traveler?
With African Americans making up a significant portion of those contributing greatly to the travel industry, including the cruise sector, the current climate, dubbed a once-in-a-generation investment opportunity, could be a come-up for those already invested in spending their dollars to explore the world.
A Black Meetings & Tourism survey found that 17% of African American respondents had taken a cruise before, and 97% of them expressed a desire to cruise again. The same survey indicated that the Caribbean is a top destination, with 87% of respondents listing it among their top three preferred destinations.
In 2019, Black U.S. leisure travelers spent $109.4 billion on travel, representing roughly 13.1% of the U.S. leisure travel market. While detailed spending statistics, particularly in the cruise sector, are limited, the general trend shows an increased interest in cruising among Black people.
Before the pandemic, Carnival was a market-beating stock, with an incredible brand as a dominant leader in the field. Economists say that because demand is not slowing down and because the cruise operator is rebuilding itself with careful calculations in an estimated short amount of time, the reports reveal that this may be the prime time for investing in the company.
However, the Motley Fool Stock Advisor analysts did not list Carnival as one of the 10 best stocks to tap into at this time, so experts always advise people to do their own research before making a significant investment.
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