- Summary:
- In this Carnival share price forecast , we look at the key catalysts for the stock and what to expect in the near term ahead of Royal Caribbean earnings
The Carnival share price has been under pressure in the past few weeks. The CCL shares have dropped to 1,400p, which is about 25% below the highest level in June this year. Its New York-listed stock closed at $21.43, valuing the company at more than $21 billion.
Carnival has struggled lately
Carnival is the biggest cruise line company in the world. The firm generated more than $20.8 billion in revenue in 2019 before the Covid pandemic. That was significantly higher than the $10 billion that Royal Caribbean made during the year and the $6.46 billion that Norwegian made.
The three companies then went through their worst year ever in 2020 as governments halted their operations. The three firms lost billions of dollars, with Carnival losing more than $10.2 billion. Therefore, with countries reopening, the stock surged by more than 135% between November last year and June this year.
However, recently, the stock has retreated as investors price in a slower recovery as the number of Covid cases rise. Worse, the number of breakthrough cases is rising in countries like the US and UK. Therefore, while demand for cruising is still strong, there are concerns that many people will be afraid to cruise.
The Carnival share price will react to the latest earnings by Royal Caribbean that will come out today. According to FactSet, analysts expect that the firm made a loss of more than $1.08 billion in the second quarter. They also expect the firm’s revenue rose to $154 million. In the results released in June, Carnival reported a net loss of $2.1 billion. It had more than $9.3 billion in cash and short-term investments.
In August, the Carnival stock price will react to the trends on the virus and any recommendations by the CDC.
Carnival share price forecast
The daily chart shows that the CCL share price has been under intense pressure lately. It has declined below the 38.2% Fibonacci retracement level of 1,465p. It has also moved below the 50-day and 100-day EMAs. The two averages have even formed a bearish crossover pattern. Notably, its attempts to rebound recently hit a strong resistance at 1,530p.
Therefore, there is a possibility that the stock will maintain the bearish trend in August. The next key reference level to watch will be at 1,265p. Any drop below this level will open the possibility of the shares will drop to the 61.8% retracement at 1,205p. The bearish view will be invalidated if the price moves above 1,545p.
