3 Red Flags for Carnival Stock
Down 67% year to date, Carnival Corporation (CCL 0.42%) has probably landed on some value investors’ radar. But a cheap stock doesn’t always mean a good deal. Let’s discuss three red flags that could make the cruise company underperform over the long term.
1. The massive debt load
Like most cruise companies, Carnival was hurt by the COVID-19 pandemic, especially after the US Centers for Disease Control’s (CDC) no-sail order scuttled its operations for much of 2020. To survive the crisis, management turned to debt markets.
As of the third quarter, Carnival reports $28.5 billion in long-term debt
