Why the shares of Royal Caribbean, Carnival and Norwegian Cruise just broke


What happened

Cruise Line Actions Royal Caribbean (NYSE: RCL), Carnival (NYSE: CCL), and Norwegian Cruise Line Holdings (NYSE: NCLH) sailed in 2022 with a strong tailwind on Monday. At 1:47 p.m. ET, shares of Royal Caribbean were up 4.9%.

Carnival and Norwegian were doing even better – up 6.3% and 6.8%, respectively.

Image source: Getty Images.

So what

It’s not too hard to guess why. On Monday morning, the Food and Drug Administration announced that it had extended its emergency use authorization for Comirnaty: 12 to 15 year olds are now eligible to receive booster doses of the COVID-19 vaccine developed by Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX).

In addition, the FDA has shortened the time these young people have to wait between completing their first vaccinations and receiving the booster shots from six months to just five months.

Finally, the FDA has approved the boosters for children as young as 5 years old if they have certain conditions that make them immunocompromised.

Now what

It’s kind of a good news / bad news situation. On the one hand, making boosters available to those aged 12 and over will increase the number of potential passengers who could cruise with Carnival, Royal Caribbean and Norwegian. And the decision to allow those who are only 5 years old to be boosted if they are part of a particularly at-risk part of the population probably foreshadows a similar expansion for all children aged 5 and over, eventually. .

And yet, on the other hand, cruise lines and their shareholders still have to contend with the fact that last week the US Centers for Disease Control and Prevention categorically stated that given the current pandemic situation, people should “avoid cruise travel, regardless of vaccination.” status.”

I repeat, all the same vaccination status.

As in whether or not the FDA allows children to receive booster shots.

And despite the fact that just now it seems that cruise line stock traders disagree with me, I think the second point is more important.

In this government agency rock-paper-scissors game, I fear the CDC’s stern warning may act like “paper”, exceeding the FDA’s “rock” assurance that boosters are safe for use. children. And as long as the CDC tells people the cruise isn’t safe even for the vaccinated, a lot of people who might have otherwise booked a trip are going to stay ashore.

As such, for now, I would suggest that it is safer to avoid all three of these actions.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About Nicole Harmon

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