Carnival Corp (CCL) declined in Pre-market, here is why?

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The stock of Carnival Corp (CCL) declined in the Pre-market. The stock lost almost 10.52% from the previous closed value in the pre-market to reach $18.04. In the last trading session, the stock closed at $20.15. The average volume of stock traded in the session was around to be 29.41 million. Let’s dig into the reasons behind the decline of the Carnival Corp (CCL) stock decline.

Reasons for the stock decline:

In the last 5 trading days, the stock lost 4.18% as of 25 November 2021. There was no specific reason linked to the decline of its stock. The investors were focused on skimming some profit after the stock went a bit high in recent weeks. The reason for the stock stability was the news by Pfizer when they announced positive news regarding their anti-viral treatment for Covid-19. But this just helped the stock to gain stability for a temporary period.

Another reason which made the investors reluctant while investing in the stock of Carnival Corp (CCL) was its long-term debt. As of the 3rd quarter of 2021, the company had long-term debt of $28 billion. This long-term debt was $9 .7 billion at the end of 2019. This significant increase in the long-term debt made the investors realize that the company would limit the shareholders’ returns in the long run.

Highlights of 3rd quarter:

  • The revenue of Carnival Corp (CCL) was reported to be $546 million.
  • As of August 2021, the net loss company reported was $2.84 Billion.
  • The company’s net profit margin was -519.41%.
  • As of August 2021, the company had cash and cash equivalents of $7.15 Billion.
  • At the end of the 3rd quarter of 2021, the company’s debt was reported to be $28 billion.

Conclusion: Should the investors be optimistic about Carnival Corp (CCL) stock?

Before the pandemic, the stock value was $51 per share, but as of today, it’s valued at $20. This is a loss of more than 55%. The stock was the first stable during the start of this year due to the vaccination but after the delta variant the stock declined more than 30% of its value. The stock will regain in the future after the tourism situation normalizes or proper antiviral treatment is approved by the FDA, which will increase the flow of the customers. This stock is now considered attractive at this value for investors to invest in in the long run.

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