Carnival, Norwegian and Royal Caribbean cruise lines all downgraded

Yahoo Finance's Ines Ferre shares how major cruise lines, including Carnival, Norwegian and Royal Caribbean, are performing after receiving a downgrade from SunTrust and MacQuarie.

Video Transcript

BRIAN SOZZI: All right, welcome back to "The First Trade." Let's get right to Ines Ferre for a deeper dive on the cruise lines. Ines, the bad news continues for the major cruise lines here.

INES FERRE: And downgrades from SunTrust and MacQuarie, both of those firms and don't anticipate a resumption in North American sailings until 2021. SunTrust is saying that it may come at least at the second quarter of next year. MacQuarie downgraded Carnival to neutral from outperform. Carnival stock is down more than 1%, with a price target of $18 down from $27 because of surging COVID-19 cases and also the potential for even more suspension of ships.

Remember that yesterday Carnival announced that it was cutting 13 ships, reducing capacity by about 9%. Year to date, the stock is down more than 78%. And also Carnival was cut to a sell at SunTrust with a price target of $10.

Now, the CDC has a no sail order that is going to expire on July 24. It is assumed that the CDC will likely extend that no sail order. We had the cruise liners recently say that they wouldn't resume sailing in North America until about mid-September or perhaps late September. So right now we are waiting for the CDC guidelines to see if they will extend that no sail order. But we we're looking at analysts that are saying don't expect these cruise liners to resume in North America until at least next year.

BRIAN SOZZI: All right. Thanks so much, Ines.