Your portfolios in brief
Founded in 1972, Carnival Corporation is a world leader in the tourism sector, specializing in the cruise market. Operating in many countries, the company employs thousands of people worldwide.
- Highlights in 2023 :
Annual guidance: Carnival has demonstrated an impressive post-pandemic recovery, reaching 95% of 2019 revenue levels in the first quarter of 2023.
Sales for the quarter: The company reported sales of $5.4 billion for the fourth quarter, marking a significant increase on the previous year.
Cruise performance: Carnival experienced strong demand for its cruises, which contributed to record revenues.
Adjusted earnings forecast: The company provided an optimistic outlook for the year and the first quarter of 2024. Carnival forecasts a 30% increase in adjusted EBITDA in 2024, with net yield growth of 8.5%.
Performance versus Wall Street expectations: Results exceeded expectations, with EBITDA per unit up 5% on 2019 levels.
- Why is this a stock to watch?
Carnival Corporation is showing signs of a robust recovery from the pandemic, with growing demand for cruise travel and record revenues. The company looks well positioned to benefit from the recovery in global tourism. Although earnings potential in 2024 may fall short of 2023, Carnival presents lower risk and considerable growth potential. The company has demonstrated effective management and a commitment to recovery and shareholder value creation.
Its share price climbed 130% in 2023, marking an impressive recovery from the lows of the pandemic. The company, a leader in the cruise industry, has not only recouped its losses, but has also positioned itself for future growth.
After starting 2023 with revenues of $12 billion and a loss of $1.6 billion, Carnival closed the year with $21.6 billion in revenues, surpassing pre-pandemic levels. With solid bookings despite higher prices, and occupancy already strong for 2024, Carnival is heading for a year of increased profitability. Net returns and adjusted EBITDA are close to 2019 levels, and the company expects a significant increase in adjusted EBITDA for 2024.
- Conclusion
At Pratte Portfolio Management, we are convinced of Carnival Corporation's potential. Including it in our portfolio was a wise decision, and we look forward to following its development as an innovative cruise company. Carnival represents a solid investment opportunity in today's recovering travel sector, and with its sustained growth prospects, strong recovery and ability to generate significant revenues despite past challenges, the stock remains attractive for our portfolios.
Markets in brief
Monday
Dow Jones: The index rose 0.58% to close at 37,683.01 points.
NASDAQ: The index gained 2.20% to close at 14,843.77 points.
S&P 500: The broad index gained 1.41% to close at 4,763.54 points.
Most of the world's stock market indices rose. There was a notable rise in technology-related stocks in the US, while oil prices plummeted in the wake of Saudi Arabia's price cuts, overshadowing concerns about the Middle East.
Boeing shares lost around 8%, weighing on the Dow, which hit a two-week low. The U.S. Federal Aviation Administration ordered the temporary grounding of certain Boeing 737 MAX 9 jets equipped with a panel that detached from an Alaska Air Group jet in mid-flight on Friday.
The U.S. dollar and Treasury yields were down. Investors are awaiting U.S. inflation data and assessing when the Federal Reserve might begin cutting interest rates. Investors were patient at the start of the week, awaiting consumer price inflation data for December as well as the release of quarterly corporate results due on Friday.
- Securities in brief
Nvidia (+6.43%): The company rose sharply thanks to growing interest in its AI-dedicated microprocessors.
Boeing (-8.03%): The share price fell following the grounding of several of its 737 MAX 9 aircraft after an in-flight incident.
Amazon (+2.66%): The company made progress, benefiting from the general craze for the technology sector.
Apple (+2.42%): The firm saw its share price rise, following the positive trend in the technology market.
Chevron (-0.60%), Exxon Mobil (-1.67%), ConocoPhillips (-1.74%): These oil companies suffered losses due to lower crude oil prices.
Johnson & Johnson (+0.25%): Slight rise after the announcement of the acquisition of Ambrx, strengthening its position in cancer treatment.
Tuesday
Dow Jones: The index fell by 0.42% to close at 37,525.16 points.
NASDAQ: The index edged up 0.09% to close at 14,857.71 points.
S&P 500: The broad index lost 0.15% to close at 4,756.50 points.
Marked by several key developments, the stock market had a mixed day, with contrasting performances among the main indices. On the one hand, concerns about persistent inflation and growing geopolitical risks are worrying. On the other, Valkyrie Investments' announcement of an imminent SEC decision on Bitcoin ETFs sparked interest, with a possible implementation as early as the following day.
In the energy sector, oil prices rebounded from a massive sell-off the previous day, with West Texas Intermediate up 2.08% to $72.24 a barrel and Brent crude up 1.76% to $77.46 a barrel. This recovery follows Saudi Arabia's decision to cut crude prices for Asian customers, stoking fears about global demand.
- Securities in brief
Bank of America (-1.55%): The bank is preparing to publish its quarterly results, influencing the market.
JPMorgan (-0.79%): Awaiting its quarterly results, the share price fell slightly.
Wells Fargo (-1.26%): The bank is also awaiting the publication of its results.
Boeing (-1.41%): The stock continues to suffer following problems with the 737 MAX 9.
Microchip Technology (-0.35%): The company warned of a drop in revenues, affecting its share price.
Nvidia (+1.70%): Despite the general climate, Nvidia set a new record at $531.40.
Apple (-0.23%): The share price fell slightly in an uncertain market.
Tesla (-2.28%): The company saw its share price fall sharply.
Alphabet (Google) (+1.44%): Google shares rose despite a mixed market.
Juniper Network (+21.81%): Sharp rise following rumors of acquisition by HPE.
Unity Software (-8%): Significant decline following announcement of massive layoffs.
Wednesday
Dow Jones: The index rose 0.45% to close at 37,695.73 points.
NASDAQ: The index gained 0.75% to close at 14,969.65 points.
S&P 500: The broad index gained 0.57% to close at 4,783.45 points.
The stock market closed higher, as investors eagerly awaited new data on US inflation and corporate earnings. In addition, market activity is fairly subdued, given that the Federal Reserve's planned interest rate cuts have already been incorporated into year-end forecasts.
Speaking in White Plains, New York Fed President John Williams offered a nuanced perspective on the Federal Reserve's inflation forecasts. "We must persist with a restrictive monetary policy approach to fully achieve our objectives. Reducing this tightness will only be possible when we are confident that inflation will stabilize at around 2% over the long term", said John Williams. At the same time, Mr. Williams expressed optimism about the latest economic indicators, describing them as "very positive".
This intervention had an immediate impact on stock markets, which after an initial rise saw their momentum slow.
- Securities in brief
Microsoft (+1.86%): Despite an uncertain economic climate, Microsoft posted a notable rise, demonstrating the company's resilience in the technology sector.
Meta (+3.65%): Meta recorded a strong rise, reflecting investor optimism towards technology giants.
Nvidia (+2.28%): Nvidia continued its upward trajectory, benefiting from growing enthusiasm for artificial intelligence technologies.
Apple (+0.57%): Apple rose slightly, despite consecutive negative analyst assessments, testifying to investor confidence in the brand.
Amazon (+1.56%): Amazon saw its shares rise following the announcement of major cuts at its Twitch subsidiary, indicating cost rationalization measures.
Boeing (+1% approx.): Boeing rose slightly after being affected by problems with one of its 737 MAXs, showing resilience in the face of challenges.
Spirit Aerosystems (+4.49%): Boeing's main supplier rose significantly, despite Boeing's recent problems.
Coinbase (-0.46%): Coinbase's share price fell slightly in anticipation of new regulations on Bitcoin ETFs.
Thursday
Dow Jones: The index recorded a slight rise, closing with a gain of 15.29 points, or 0.04%, at 37,711.02 points.
NASDAQ: The index ended stable at 14,970.19 points.
S&P 500: The index edged down 0.07%, closing at 4,780.24 points. It briefly surpassed its previous closing record of 4,796.56 points during the session.
The December Consumer Price Index (CPI) report showed a slightly higher-than-expected increase, with consumer prices up 0.3%, bringing the annual rate to 3.4%. Economists were expecting an increase of 0.2% in December and 3.2% on an annual basis.
Excluding volatile food and energy prices, CPI is in line with expectations, indicating persistent but diminishing inflationary pressure. This suggests that future interest rate cuts may be slower in coming. The rise in CPI initially drove yields higher, with the 10-year note peaking at 4.068% before falling back to around 3.98%.
This rise in inflation could prompt the Fed to maintain or intensify its restrictive monetary policy, potentially increasing market volatility.
- ETF Bitcoin
Bitcoin briefly hit the $49,000 mark earlier in the day before dropping back above $46,000. The moves follow Wednesday's approval of regulatory changes by the U.S. Securities and Exchange Commission (SEC), which paved the way for Bitcoin exchange-traded funds and expanded investor access to the flagship cryptocurrency.
- Stockss in brief
BlackRock iShares Bitcoin Trust (-4.69%): This fund fell on its first day of trading.
Coinbase (-6.70%): The platform suffered a decline, probably in reaction to the introduction of bitcoin ETFs.
Marathon Digital Holdings (-12.60%) and Riot Platforms (-15.82%): These cryptocurrency companies saw sharp declines.
Microsoft (+0.49%): Slight rise, briefly becoming the world's largest capitalization.
Chesapeake Energy Corporation (+3.16%): Increase following announcement of merger with Southwestern Energy.
Citigroup (-1.77%): Decline after disclosure of exceptional charges and provisions.
Hertz (-4.28%): Decline following the announcement of the sale of part of its electric vehicle fleet.
Netflix (+2.91%): Increase following positive subscriber announcements.
Friday
Dow Jones: The index rose moderately at the start of the session, gaining 94 points, or 0.3%.
NASDAQ: Index up 0.2% in early morning trading
S&P 500: The index gained 0.3% at the start of the session.
Fourth-quarter results were analyzed by investors, while the December wholesale price report showed an unexpected drop of 0.1%. This follows Thursday's consumer price data, which showed an increase of 0.3% over the month and 3.4% year-on-year.
- Stockss in brief
Delta Air Lines (-5%): The airline suffered a significant decline despite better-than-expected fourth-quarter results.
Bank of America (-2%): Shares fell following the announcement of a decline in fourth-quarter earnings.
Wells Fargo (-2%): Despite higher quarterly earnings, the bank's shares fell.
Citigroup (+1.5%): The company posted an increase despite a considerable loss of $1.8 billion for the quarter.
JPMorgan Chase (+2%): Shares rose even after a 15% year-on-year reduction in earnings.
Conclusion
In summary, the week witnessed a series of key events that shaped the financial market landscape. We saw a moderate rise in the major indices, with the Dow Jones, NASDAQ and S&P 500 posting notable gains. The cruise sector, led by Carnival Corporation, shone particularly brightly, demonstrating a robust recovery and significant growth potential.
