CCL and NCLH surge 9% and 11% respectively on mean-reversion bounce, while RCL rises just 2% amid smaller upside potential.
Carnival (CCL) and Norwegian Cruise Line (NCLH) shares jumped 9% and 11% in midday trading, recovering from a month-long selloff. The gains reflect a low-quality bounce, favoring the most damaged stocks in the sector.
All three cruise operators faced pressure recently, with CCL down 11%, NCLH off 21%, and RCL lower by 13%. Royal Caribbean (RCL), up only 2%, has less room to rebound after a 190% five-year gain, though it reported four straight earnings beats, including Q1 EPS of $3.60 versus $3.20 expected.
The sector’s struggles stem from rising fuel costs, with WTI crude at $98.75 per barrel, and weakening consumer discretionary spending.