Is Carnival Stock Headed Back To $40 Levels?

Is Carnival Stock Headed Back To $40 Levels?

BRAZIL - 2020/05/18: In this photo illustration a Carnival Corporation logo is seen displayed on a ... [+] smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)



SOPA Images/LightRocket via Getty Images

Carnival (NYSE: CCL) stock has jumped by almost 60% over the last two months, as investors viewed news surrounding the efficacy of Covid-19 vaccines and commencement of dosing in the U.S. as a sign of the beginning of the end of the Covid-19 pandemic. The jump in the stock price is largely warranted, considering that Carnival and other cruise stocks have been bearing the brunt of the pandemic. Carnival suspended cruises in March 2020 and was burning cash at a rate of around $770 million a month as of Q3. With the pandemic related uncertainty reducing, are further gains in the cards for Carnival stock, which still remains down by about 50% from February 2020 levels?

We think it's unlikely that it will reach the $40+ levels seen in February 2020 anytime soon for a couple of reasons. While Carnival was initially looking at setting sail from U.S. ports in late 2020, it has pushed back its timelines as coronavirus infections