What happened
Monday is looking great on Wall Street for companies involved in the travel and tourism sector -- both on Earth and above it.
As of 1:20 p.m. ET, shares of cruise line operators Carnival (NYSE:CCL) (NYSE:CUK) and Norwegian Cruise Line (NYSE:NCLH) were both cruising ahead, up 14.1% and 8.5%, respectively. Raise your gaze just a bit, and you'll see space tourism company Virgin Galactic (NYSE:SPCE) rose as well -- up 4.5%.
So what
Carnival is enjoying the session's biggest gains, and it's no secret why. As TheFly.com reports, JP Morgan and Bank of America Securities both announced Monday that they had upgraded its shares to buy. (Technically, only Bank of America used the word buy. But JP Morgan upgraded the stock to overweight, which is basically the same thing.)
Both banks' analysts said they formed their positive opinions of Carnival stock after meeting with the company's management recently, who apparently spoke of "bullish" trends in cruise bookings for the first half of 2024. The pent-up demand for cruising appears not yet to have been satisfied, and there's no lack of customers for Carnival to serve.
What's more, Bank of America Securities analyst Andrew Didora noted that demand remains "steady" across the industry -- not just at Carnival, but at Norwegian Cruise Line and Royal Caribbean (NYSE:RCL) as well. Didora added that there seems to be little sign of a price war emerging among the three major cruise companies, and said the pricing of tickets is still "rational." In addition to upgrading Carnival stock, he also hiked his price target on Norwegian to $19 a share.
That's only about 2% more than Norwegian stock costs after Monday's price spike, however. For Carnival, the analyst's $16 price target still implies another 7% gain.
Now what
Now what about Virgin Galactic? On the one hand, the positive comments about the state of the cruise industry may imply a healthy appetite for tourism of all sorts -- space included. On the other hand, neither JP Morgan nor Bank of America Securities had anything of interest to say about the space tourism company, and Virgin Galactic's customers (who famously pay anywhere from $250,000 to $450,000 for a few minutes in space) aren't exactly in the same class as Carnival's customers (who can book at 12-day cruise for as little as $1,069).
That being said, Virgin Galactic has been making its own good news of late, flying a successful test flight to space and back last month and preparing to begin commercial flights for space tourists as early as this month. If successful, Virgin Galactic will see a marked increase in quarterly revenues and finally begin generating data about margins that will give investors a better idea of the company's ability to eventually become profitable (or not).
As the date of its inaugural space tourism flight approaches, and excitement mounts, it's possible investors will see further gains in this, the original space stock. Whether Virgin Galactic stock will deserve those gains remains to be seen.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.