Cruise Company Stocks Plunge; Will People Still Get on Boats?

[Stocks-to-Watch]

Cruise companies are falling today after a disaster on a cruise ship off the coast of Italy a few days ago claimed at least 11 lives. On Jan. 13, the Costa Concordia ran aground just off the island of Giglio.

Carnival Corp. (CCL) owned the ship, and its shares are down 14% this afternoon. Rival Royal Carribean Cruises (RCL) is off by 5.3%.

In a note, Citi analyst Greg Badishkanian said that cruise booking volumes may have fallen as much as 10% in the past few days, although sometimes cruise lines see similar drops given normal day-to-day volatility, the AP reported.

Nomura analyst Harry Curtis also wrote that Europeans could be spooked by reports of the company’s slow response time to the disaster.

“Yields for the remaining Costa brand, which is 14% of CCL’s global capacity, could be down about 10% this year given the timing of the tragedy. January is a crucial time for European bookings because it is the onset of Wave Season (three months when +50% of bookings are made). Making matters worse, CCL/Costa’s silence and slow response to the incident presumably will not be viewed favorably by Costa’s passenger base in Europe, which is sourced largely from Germany, Italy, and France.”



Original Article Source by Barrons.com

[brandontips]

Receive technical information on the market.
Get a free copy of our stock report. hottestpicks dot net