Carnival share price has been trading in a tight range since the end of July. Carnival Corporation is the world’s largest cruise line operator ahead of Royal Caribbean and Norwegian Cruise Lines. It has a total market capitalization of $25.72 billion.
The Carnival share price has been struggling to recover amid the resurgence of coronavirus infections. The coronavirus tied to the highly contagious Delta variant has seen a slowdown in the travel sector. Carnival’s stock has slipped more than 4% in the past five days.
Carnival’s biggest rival, Royal Caribbean recently reported six Covid-19 cases on its seas cruise. Four of the passengers who tested positive for the virus were vaccinated. This indicates that despite the wide vaccination rollouts, people are still at risk. However, Carnival recently announced the mandatory mask requirements for its passengers.
Despite the reopening of the cruising industry, the companies are still far from recovery. Carnival recently announced its plans to return its entire fleet to service by the end of 2021. The company hopes that its total operating capacity will be around 75% by the end of the year.
The company’s high amount of leverage has also been heavily weighing on its growth and recovery. Its total net cash debt for the June quarter came in at $20 billion up from $11 billion. The repayments of debts alongside higher interest rates could scale down on shareholder returns.
Carnival share price has been trading in a congestion area for the past two weeks. The company gained 7.18% on Friday ahead of the market opening. It hit an intraday low of $22.42.
At the time of writing, it was up 1.52% at $22.90. On the 4-hour chart, it is trading above the 25 and 50-day exponential moving averages (EMAs).
Bulls need to gain momentum to push it above the price wall at $22.40. If this happens the next target will be the resistance level at $24.52. A move the downside could lag the prices to find support at $20.80.