Cruise Lines Rise for First Time This Week as Analyst Says Selloff Overdone

Cruise operators rise Friday as an analyst says a selloff in shares was overdone.
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Cruise operators were sailing into calmer waters on Friday as an analyst said the week-long sell-off was "overdone."

Norwegian Cruise Line Holdings (NCLH) - Get Report, Royal Caribbean Cruises (RCL) - Get Report and Carnival Cruise Lines CCL were all in positive territory following a week of steep losses due to the spread of the coronavirus.

"From what I can tell a number of the travel names that have gotten hammered over the last month or so are seeing a little bit of relief," said James Hardiman, managing director of equity research at Wedbush Securities. "At the end of the day, they're still down 35%-40%, while the S&P 500 is down maybe about 11%."

Hardiman said that after listening to conference calls with cruise lines, "people know that 2020 is going to be a mess, but I think they probably came away thinking that this isn't going to be the end of the world and that eventually - and nobody knows when eventually is going to come - people are going to get back to traveling and that cruise is going to get its fair share of travel customers."

"It's also worth nothing that, of the three, Norwegian is probably the least affected by the coronavirus," he said. "On a relative basis, the Norwegian selloff is probably particularly overdone. They didn't have any ships in China to begin with, though they certainly had ships in and around Asia."

Norwegian Cruise Line recently canceled its voyages in Asia through the third quarter of 2020.

Hardiman noted that interactive fitness product maker Peloton Interactive (PTON) - Get Report had been up about 15% earlier the week in a down market, but was recently off about 8% to $26.33.

"Not that the coronavirus is over by any means," he said, "but I think people are looking at the relative performance over the last week and seeing where things are overdone or underdone."

Meanwhile, airline stocks continued to suffer, with United Airlines (UAL) - Get Report, American Airlines Group (AAL) - Get Report, Delta Air Lines (DAL) - Get Report, Southwest Airlines (LUV) - Get Report and Jetblue (JBLU) - Get Report seeing losses.