Carnival's stock leads the S&P 500's losers as BofA raises a pricing concern

By Tomi Kilgore

Carnival's stock is having its worst day in nearly two years, Norwegian and Royal Caribbean shares also drop

Shares of cruise operators were having a pretty bad day Friday, as BofA Securities analyst Andrew Didora suggested there was a crack in the sector's pricing armor.

Carnival Corp.'s stock (CCL) dropped 8.5% in midday trading, enough to pace the S&P 500 Index's SPX decliners. It was also headed for the worst one-day selloff since it tumbled 13.7% on Nov. 16, 2022, according to Dow Jones Market Data.

Cruise companies have been boasting in their quarterly earnings reports about record bookings at "considerably higher prices" - Carnival's words - than a year ago.

But on Friday, BofA's Didora wrote in a note to clients that based on his research, of cruise prices pulled in early June, "there was modestly softer pricing in ocean markets relative to early May."

During that time, Didora said, 40% of cruise itineraries had softer pricing, compared with 33% in May.

Of the rest of the itineraries, 32% had higher pricing, compared with 43% in May, while 28% had flat pricing.

The S&P 500's second worst performer Friday was Norwegian Cruise Line Holdings Ltd.'s stock (NCLH), which slumped 7.8%. Shares of Royal Caribbean Group (RCL) weren't far behind, as they slid 5.7% to be the index's fifth-biggest loser.

Read more about Norwegian's and Royal Caribbean's latest earnings reports.

And New York Stock Exchange newbie Viking Holdings Ltd.'s stock (VIK) took a 3.4% hit, to put it on track for its worst day since going public on May 1.

The region seeing the biggest pricing decline on average in the past month was Western Caribbean, where prices fell 6%, with inside room rates slipping 1%, balcony room pricing down 7% and oceanview room pricing lower by 9%, Didora wrote.

The region with the second biggest price decline was the Mediterranean. Overall prices fell 4%, as inside prices were down 3%, balcony prices dropped 11%, oceanview prices slipped 2% and suite prices were unchanged.

The only region seeing a price increase was Eastern Caribbean. Prices rose 2%, as inside pricing jumped 8%, suite pricing was up 4% and oceanview prices moved up 3%, while balcony pricing fell 6%.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

06-14-24 1224ET

Copyright (c) 2024 Dow Jones & Company, Inc.