Carnival PLC’s (LON:CCL) net debt is set to more than double from pre-pandemic levels, according to analysts at Shore Capital, who in a note on Wednesday questioned the recent sentiment change that had helped spark a partial recovery in the share price of the cruise ship operator.
“The stock is valued on pro-forma fully recovered [price earnings ratio] of 18x and [an enterprise value to earnings ratio] of 10x, sharply above metrics immediately prior to the pandemic and more consistent with long-term multiples,” the broker said.
READ: Carnival boosted by bookings but posts another heavy loss
Analysts added that the company’s de-rating in 2019 had “reflected concerns over industry capacity growth and yield development” and therefore the recent positive change in sentiment was unclear given “significant uncertainty” around the future of the industry.
Carnival’s fortunes were dealt another blow earlier today when the firm announced that P&O Cruises Australia will be extending its pause in operations until September 17, delaying trips for guests due to depart on July 31.
Shares in the firm were up 1% at 1,621p in late-morning trading.