- Barclays Capital cut its share price target for Royal Caribbean Cruises Ltd (RCL), the world's second largest cruise operator, to $1 from $20 and its rating on the stock to "underweight" from "equal-weight".
- "While it is well known that cruise demand has been declining precipitously since last fall, we do not believe the magnitude of the decline is appreciated," Barclays said in a note to clients on Wednesday.
- "While we believe RCL will stay solvent, we estimate the company would become precariously close to facing liquidity issues," Barclays added.
- A spokesman for Royal Caribbean Cruises told Reuters the company was in its "quiet period" ahead of publishing fourth-quarter results on Jan. 29 and would not comment on liquidity issues or any research reports.
- Barclays lowered its earnings per share estimate for 2009 to a negative $0.92 from $1.98 and initiated a 2010 EPS estimate of minus $1.22.
- It said it expected Royal Caribbean to miss fourth-quarter consensus estimates and report a 10 cents per share loss for the quarter.
Always a bear market somewhere
p.s. the other 2 shorts I entered yesterday are among the few red names on my screens. Now we have to all wait until 2:15 PM and then act like lemmings running off a ship based on the magic text of the Fed release.
No position
4 comments:
Good call on EAT. Added it today whne it couldn't hold 12 on this huge market rally.
TM: My family operates one of the largest (revenue) cruise businesses in the country; it really isn't that large (sales in millions) but the cruise industry is really a bunch of mom and pop shops; my parents are one of those mom and pop shops that grew fairly large over the past 8 years. Good for them.
December 07 to December 08 business is down 80%; they have gone from a call center with 20 people to less than 5. Interestingly, they had a great January 09 but only in the high end cruises; RCL is a middle of the road and necessarily doesn't attract the luxury cruise buyer; this is more the deal conscious person who wants something nicer.
The other lesson here is this; my parents retired in 1999 but kept the cruise part of their business. They survived 9/11 and then with some savvy internet people saw their business grow exponentially once business returned. This was done in their "retirement". There was no bail out; they were smart enough to survive and then prosper. That is how it usually works.
Stone, one small victory in a flurry of defeats today.
Guy, thanks for that info but where were you 3 months ago ;) Need to get more prompt data - not after stocks hammered 50%+ :)
Good call. Don't wait 3 more months before your next update. Cruise Pulse survey tracks monthly travel agent booking trends and based on results Cruise Market Watch revised downward worldwide cruise revenue estimates for 2009. Updates during the wave season and subsquent quarters of 2009. www.cruisemarketwatch.com
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