Holding billions in debt, cruise companies like Carnival and Royal Caribbean felt the pain of the Federal Reserve’s rate hikes Wednesday.
"The reason the stocks, in my opinion, went down a bunch on Wednesday was because you just had this fear that the companies are going to have to pay more for their debt," Deutsche Bank analyst Chris Woronka said. The companies' losses persisted throughout the week.
At the same time, Woronka said their revenues might not recover as strongly in a broader economic downturn if people are spending less on leisure. that Royal Caribbean will use high-yield corporate bonds, or"junk-bonds," to help refinance $2 billion of debt due next year.. Earlier this month, Stifel analyst Steven Wieczynski reiterated a buy rating for Norwegian, noting that cruise bookings have climbed, particularly for luxury lines that cater to higher-income customers.
Scholes says that Norwegian is best-positioned with a high proportion of luxury options. But between high interest expenses and revenues that are still recovering, he said none of the cruise companies are yet"out of the woods." Carnival shares are down about 55% this year, while Norwegian stock is down about 35% and Royal Caribbean has fallen about 43%.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed feeds recession fears, Japan jumps in to support yen By ReutersFed feeds recession fears, Japan jumps in to support yen
Read more »
Breaking: Bitcoin Plunges as Fed Announces Another Big Interest Rate HikeFed policymakers have expectedly announced their third consecutive 75-basis-point rate hike
Read more »
Two-year Treasury yield at highest since 2008 after Fed talks toughInvestors wary of government debt after Wednesday's rate hike by the Federal Reserve was accompanied by resolutely hawkish rhetoric from Fed Chair Jay Powell.
Read more »
Price analysis 9/21: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, MATIC, SHIBBitcoin and altcoins hold marginal gains after the Fed announced a 0.75% interest rate hike, but a strong reason to incentivize buying has yet to emerge.
Read more »
Bitcoin price, equity markets gyrate after U.S. Fed's interest rate decisionCrypto prices were highly volatile, in line with equities, following the Fed's decision to hike interest rates by 75 basis points.
Read more »
10-Year Treasury Yield Falls as Markets Digest Fed Rate Hike, Look Ahead to PMI DataThe yield on the benchmark 10-year Treasury fell on Friday as markets adjusted to the Fed’s rate hike and attention turned toward September flash PMI data.
Read more »