At Sea: Cruise Industry Defies Pandemic Aftermath

The COVID-19 pandemic has slowly receded into the background, yet some industries are still feeling its aftereffects. The cruise industry, in particular, continues to grapple with the consequences. Despite the positive outlook in the hospitality and leisure sector overall, major cruise companies are showing varying reactions to the normalization of the vacation market. Whether and how the industry will cope with the recent hurricanes in the Gulf of Mexico remains to be seen. Although many cruise companies have recently reported rising profits and revenues, some are facing challenges due to pandemic-related debt. A glimmer of hope, however: According to James Hardiman, an analyst at Citi, the sector offers promising opportunities. His analysis shows that website traffic for cruises reached record levels in September and that this growth could continue beyond 2025. Two companies stand out with particularly high ratings: Carnival Corporation and Royal Caribbean Group. Both have received the coveted "Perfect 10" rating from the TipRanks Smart Score tool. A closer look at these cruise giants reveals why analysts and algorithms alike are convinced of their potential. Carnival Corporation takes off Carnival Corporation, a giant with over 50 years of experience, recorded record revenues of $7.9 billion in the third quarter of 2024, an increase of more than 15% compared to the previous year. The company is pursuing an ambitious debt repayment strategy and has so far repaid debts amounting to $7.3 billion. Analyst James Hardiman sees a growth opportunity here that exceeds expectations and rates Carnival as growth-strong. Royal Caribbean Group: Growth potential on a high course Royal Caribbean remains a market leader and surprises with an innovative approach and its own resorts. The recently resumed dividend reflects confidence in future development. Analyst Hardiman forecasts a bold earnings target of $20 per share for 2027 and believes in enormous growth potential. Although the average price target consensus is slightly lower, the rating remains "Strong Buy.