One group I've missed as I've railed against consumer discretionary are the cruise lines; one reader had mentioned it in comments late last week so I started looking into it. An analyst is out today against Royal Caribbean (RCL) raising liquidity concerns - which is a kiss of death in this type of market. I assume cruise ships are not too big too fail, but who knows anymore.
- Barclays Capital cut its share price target for Royal Caribbean Cruises Ltd (RCL), the world's second largest cruise operator, to $1 from $20 and its rating on the stock to "underweight" from "equal-weight".
- "While it is well known that cruise demand has been declining precipitously since last fall, we do not believe the magnitude of the decline is appreciated," Barclays said in a note to clients on Wednesday.
- "While we believe RCL will stay solvent, we estimate the company would become precariously close to facing liquidity issues," Barclays added.
- A spokesman for Royal Caribbean Cruises told Reuters the company was in its "quiet period" ahead of publishing fourth-quarter results on Jan. 29 and would not comment on liquidity issues or any research reports.
- Barclays lowered its earnings per share estimate for 2009 to a negative $0.92 from $1.98 and initiated a 2010 EPS estimate of minus $1.22.
- It said it expected Royal Caribbean to miss fourth-quarter consensus estimates and report a 10 cents per share loss for the quarter.
I'm adding this to my potential short list - I am afraid to get involved right ahead of earnings reports - competitors include Carnival (CCL). I haven't done enough homework yet on this grop to really differentiate.
Always a bear market somewhere
p.s. the other 2 shorts I entered yesterday are among the few red names on my screens. Now we have to all wait until 2:15 PM and then act like lemmings running off a ship based on the magic text of the Fed release.
No position
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