Investors who have owned stocks in the past year have generally experienced some big gains. But there is no question some big-name stocks performed better than others along the way.
Carnival’s Big Run: One company that has been a great investment in the past year has been cruise line giant Carnival Corp (NYSE:CCL).
Carnival is the largest company in the cruise industry, and for most of the past decade it benefited from an aging baby boomer generation. Coming into 2020, Carnival was on track to add 18 new ships to its fleet of more than 100 global ships over the next five years.
Unfortunately, after a solid decade of returns, Carnival experienced a near worst-case scenario to kick off the 2020s. The global COVID-19 outbreak shut down all of Carnival’s operations in March of last year, and the company recently extended its cancellations of all cruises through June.
In 2019, Carnival generated $4.32 in EPS on $20.82 billion in revenue. In 2020, those numbers plummeted to a loss of $13.21 per share on just $5.59 billion in revenue.
At the beginning of 2020, Carnival shares were trading around $51. By the beginning of March, the stock had dropped below $35 after news of the virus spreading in China prompted concerns about a U.S. pandemic. On March 12, Carnival shares plummeted from $21.75 to close at $14.97. A day later, the company announced it would be suspending all cruises for 30 days.
The stock broke below $10 for the first time on March 18 and ultimately bottomed at $7.80 in early April.
Carnival In 2021, Beyond: Carnival shares initially bounced as high as $25.27 in June on optimism cruise ships would be back on the water sooner rather than later. Unfortunately, the initial rally fizzled and the stock dropped back down to $12.11 by late October.
In February 2021, Carnival shares hit new post-crisis highs and even reached the $30 level before pulling back to $28.93.
Carnival investors who bought one year ago and held on have generated an okay return on their investment. In fact, $1,000 in Carnival stock bought on March 16, 2020 would be worth about $1,633 today.
Looking ahead, analysts are expecting Carnival’s stock to run out of steam again in the next 12 months. The average price target among the 15 analysts covering the stock is $20, suggesting 31% downside from current levels.