Cruise stocks on the move as Cruise ships return to Canadian waters
By Kathi on Jul 16, 2021 | 04:36 AM IST
Cruise ships are about to return to the Canadian waters on
November 1st.
On Thursday, the country’s minister of transport, Omar
Alghabra, said Canada will lift the COVID-19 related ban on cruises in November
for operators that fully meet the public health requirements.
The announcement sent a wave of celebration in cruise
stocks on Friday morning as the world’s second-largest country by total area
had previously disclosed plans of keeping the ban in place until February
2022.
Royal Caribbean
(NYSE: RCL) and Norwegian
Cruise Line (NYSE: NCLH) shares were up 2.0% each in premarket trading.
Carnival Corp (NYSE: CCL) shares were up 1.0%. The three stocks are still down
double digits so far this month.
Truist Securities Patrick Scholes acknowledges the good
news but pointed out that ‘it’s not without risks”. In his interview with
CNBC’s “Squawk on the Street”, he said:
“Things are normal right now, but there’s still a
tremendous amount of risk here. It would just take one large outbreak again to
send this industry back to where it was a year ago.”
According to Scholes, it could take until 2023 or maybe
later to get completely back to normal. Wedbush Securities’ James Hardman
agreed during the same interview with CNBC that significant risks related to
the rise of the new delta variant remain in place and can potentially weigh on
the stocks in the future. Meanwhile, however, “every step in the direction of
normality is good news,” he added.